Ravindra Kumar Sinha, aged about 75 years, son of Late Shivnandan Prasad, resident of v. 1. The State of Jharkhand 2. Sukhdev Mahato, son of Sri Shambhu Mahato, resident
Case Details
1 Cr.M.P. No.469 of 2021 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 469 of 2021 Ravindra Kumar Sinha, aged about 75 years, son of Late Shivnandan Prasad, resident of Heaven Tower, Jaiprakash Udyan, Adityapur, Post – Adityapur, Police Station –Adityapur, District –Seraikella -Kharsawan .... Petitioner Versus 1. The State of Jharkhand 2. Sukhdev Mahato, son of Sri Shambhu Mahato, resident of House No. 46, Road No. 4, Sangam Vihar, Sonari, Police Station –Sonari, Post – Sonari, Jamshedpur, District –East Singhbhum …. Opp. Parties P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY ….. For the Petitioner For the State For the O.P. No.2 : Mrs. Ritu Kumar, Advocate : Mr. Samavesh Bhanj Deo, Advocate : Mrs. Shatakshi, Advocate : Mr. Pankaj Kumar, P.P. : Mr. Indrajit Sinha, Advocate : Mr. Ankit Vishal, Advocate ….. By the Court:- 1. 2. Heard the parties. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 Cr.P.C. with a prayer to quash the entire criminal proceeding initiated against the petitioner in connection with Adityapur P.S. Case No. 226 of 2020 registered for the offences punishable under Section 406/420/467/468/471/120B of the Indian Penal Code. 3. The allegation against the petitioner is that the petitioner entered into an agreement for sale of his property with the company of the informant-opposite party no.2 in the name and style of Srinath Homes India Private Limited. The value of the 2 Cr.M.P. No.469 of 2021 property was estimated at Rs.26,17,60,000/- and the petitioner took an advance of Rs.1,00,00,000/- vide cheque dated 04.04.2019 and prior to that the petitioner took Rs.20,00,000/- vide cheque dated 29.01.2019, Rs.30,00,000/- vide cheque dated 28.03.2019 and subsequently the petitioner took Rs.1,50,00,000/- vide cheque dated 04.05.2019 and thus the petitioner has together taken Rs.3,00,00,000/- but thereafter with an intention to cheat the company of the informant -opposite party no.2, the petitioner entered into another agreement with M/s. Sahara Construction on 25.07.2020. Thereafter, the M/s. Sahara Construction constructed a boundary wall over the land concerned and the informant- opposite party no.2 came to know that the description of the land has not been properly made by the petitioner in the Schedule of the agreement entered into by him with the informant-opposite party no.2 and his company. On the basis of the said F.I.R., police registered Adityapur P.S. Case No. 226 of 2020 for the offences punishable under Section 406/420/467/468/471/120B of the Indian Penal Code and took up the investigation of the case and the investigation of the case is pending. 4. It is submitted by the learned counsel for the petitioner that the entire allegation made in the F.I.R. is concocted and manufactured. It is next submitted that during the pendency of this criminal miscellaneous petition, the opposite party no.2 has already received Rs.3,00,00,000/- and in this regard, the learned counsel for the petitioner drawing the attention of this Court to order no.10 dated 26.07.2022 passed in this case, submits that the 3 Cr.M.P. No.469 of 2021 petitioner handed over a demand draft of Rs.1.50 Crore which was received by the learned counsel for the respondent in Court and drawing attention of this Court to the order no.11 dated 17.10.2022 passed in this case, it is submitted by the learned counsel for the petitioner that another sum of Rs.1.50 Crore has
Legal Reasoning
It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied) that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating; where there was any deception played at the very inception. If the intention to cheat has developed later on, the same will not amount to cheating. 7. It is also a settled principle of law that if the property entrusted to an accused is used by him, mere retention of that property would not amount to dishonest misappropriation of the property as has been held by the Hon’ble Supreme Court of India in the case of Satish Chandra Ratanlal Shah vs. State of Gujarat & Anr. reported in (2019) 9 SCC 148, paragraph nos. 11 to 13 of which reads as under:- 8 Cr.M.P. No.469 of 2021 “11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with Section 406 IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that Respondent 2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognises a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a 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 a clear case of entrustment. 12. In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 IPC. Hence the learned Magistrate committed a serious error in issuing process against the appellant for the said offence. Unfortunately, the High Court also failed to correct this manifest error. 13. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168: 2000 SCC (Cri) 786]) In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot 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. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.” (Emphasis supplied) the 8. It is also a settled principle of law that in order to establish the offence punishable under Section 406 of Indian Penal Code the following ingredients are to be established :- (i) Mens rea 9 Cr.M.P. No.469 of 2021 (ii) There must be dishonest misappropriation or conversion to one’s own use, or use in violation of a legal direction or of any legal contract
Arguments
been handed over to Srinath Homes India Private Limited and photocopy of the bank draft and receiving of the said amount was produced in this Court which was kept on record. It is further submitted that Mr. Sah, the learned counsel for the opposite party no.2 on 17.10.2022 admitted that principal amount to the tune of approximately Rs.3 Crore has been received by the opposite party no.2 but the interest has not been paid by the petitioner. It is next submitted by the learned counsel for the petitioner that the informant himself has violated the terms and conditions of the agreement and never took any steps for execution and registration of the sale deed within the stipulated time and after expiry of the stipulated time, the informant lodged the present case with an ulterior motive. It is next submitted that the validity of the agreement dated 03.04.2019 entered into between the parties was only for 11 months as the agreement was not a registered one and though the petitioner made several requests to the informant to get the agreement registered but the informant did not agree for the same. It is next submitted that as the petitioner has already returned the advance amount taken by it to show his bonafide intention and the opposite party no.2 has received the same, hence no mens rea regarding any offence punishable in law, can be 4 Cr.M.P. No.469 of 2021 attributed to the petitioner. It is next submitted that there is no allegation against the petitioner that since the very inception of entering the agreement with the opposite party no.2 or his company, the petitioner has any dishonest intention. Hence, no offence punishable under Section 420 of the Indian Penal Code is made out against the petitioner. It is then submitted that as the only allegation against the petitioner is that he retained the advance amount of Rs.3 Crore with him, hence the same cannot be termed as dishonest misappropriation of the property more so because the same has been returned by the petitioner to the opposite party no.2 and the opposite party no.2 has received the same without demur. It is next submitted that as there is no allegation of forging any document by the petitioner which purports to be a valuable security, hence no offence punishable under Section 467 of the Indian Penal Code is made out against the petitioner and as the offence of cheating is not made out nor offence of forgery is made out against the petitioner, hence the offence punishable under Section 468 of the Indian Penal Code is also not made out against the petitioner either. It is next submitted that there is no allegation against the petitioner of having fraudulently or dishonestly using as genuine any document which the petitioner knows or had reason to believe to be forged, hence the offence punishable under Section 471 of the Indian Penal Code is also not made out. It is then submitted by the learned counsel for the petitioner that in the absence of any allegation against the petitioner of having done any illegal act by the petitioner or any 5 Cr.M.P. No.469 of 2021 other person, in criminal conspiracy with any other person, the offence punishable under Section 120B of the Indian Penal Code is not made out. It is next submitted that the dispute between the parties is basically a civil dispute and the advance amount which was taken by the petitioner has already been undisputedly returned by the petitioner to the opposite party no.2, hence the continuation of criminal proceeding against the petitioner would amount to abuse of process of court as the admitted fact that the petitioner entered into agreement with M/s. Sahara Construction Limited and M/s. Sahara Construction Limited has carried out the construction of the boundary wall over the land in question, goes to show that, the contention of the informant-opposite party no.2 that the petitioner is not the owner of the land in question is out and out false. It is next submitted by the learned counsel for the petitioner drawing attention of this Court to the supplementary affidavit dated 15.06.2023 that the petitioner is also the owner of the adjacent land of the land in respect of which, a power of attorney was executed in his favour, hence by no stretch of imagination, it can be said that the petitioner is not the owner of the land in respect of which he entered into an agreement for sale with the informant-opposite party no.2 and his company. Hence, it is submitted that the entire criminal proceeding initiated against the petitioner in connection with Adityapur P.S. Case No. 226 of 2020 registered for the offences punishable under Section 406/420/467/468/471/120B of the Indian Penal Code be quashed and set aside. 6 Cr.M.P. No.469 of 2021 5. The learned Addl. P.P. and the learned counsel for the opposite party no.2 on the other hand vehemently oppose the prayer for quashing the entire criminal proceeding initiated against the petitioner in connection with Adityapur P.S. Case No. 226 of 2020 registered for the offences punishable under Section 406/420/ 467/468/471/120B of the Indian Penal Code. Relying upon the Judgment of Hon’ble Supreme Court of India in the case of Priti Sharaf & Anr. Vs. State of NCT of Delhi & Anr., reported in (2021) SCC Online SC 206, wherein in the facts of that case when the ingredients of the offences punishable under Section 406 and 420 of the Indian Penal Code was present in the allegation made in the complaint/F.I.R./charge sheet, the Hon’ble Supreme Court of India observed that simply because there is a remedy provided for breach of contract or arbitral proceeding initiated at the instance of the appellant before the Hon’ble Supreme Court of India that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy and that the initiation of criminal proceeding in any manner will be an abuse of process of court. It is next submitted that the ingredients of the offences punishable under Sections 406/420 of the Indian Penal Code, is there in the F.I.R. itself. Hence, it is submitted that even if the petitioner has paid back Rs.3 Crore advance, he took, but that by itself will not absolve the petitioner of criminal liability. Hence, it is submitted that this criminal miscellaneous petition being without any merit be dismissed. 7 Cr.M.P. No.469 of 2021 6. Having heard the submissions made at the Bar and after going through the materials in the record, it is pertinent to mention here that it is a settled principle of law as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Anr. reported in (2005) 10 SCC 336, paragraph no. 6 of which reads as under :- 6. Xxxx xxxx xxxx
Decision
(iii) The accused dishonestly used or disposed of the property 9. Now coming to the facts of the case, there is absolutely no allegation of any dishonest misappropriation of the entrusted property by the petitioner. The only allegation is that in terms of the agreement for sale, the petitioner received an advance and subsequently, he entered into a development agreement with a third party; which agreement, the petitioner says, was entered into by him, after the expiry of the agreement entered into by him with the informant and his company; and in the meanwhile, the petitioner also returned that advance amount to the company of the informant-opposite party no.2 which fact remains undisputed. So under such circumstances, this Court has not hesitation in holding that the offence punishable under Section 406 of the Indian Penal Code is not made out. 10. So far as the offence punishable under Section 420 of the Indian Penal Code is concerned, the essential ingredients of the said offence is :- (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 10 Cr.M.P. No.469 of 2021 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 as has been held by the Hon’ble Supreme Court of India in the case of Mohammed Ibrahim & Ors. vs. State of Bihar & Anr., reported in (2009) 8 SCC 751. 11. Now coming the facts of the case, there is no allegation of any deception of the informant-opposite party no.2 or his company by the petitioner since the very inception. The only allegation against the petitioner is that after entering into an agreement for sale with the informant-opposite party no.2 and his company, the petitioner entered into another development agreement. So in the absence of any specific allegation against the petitioner of any dishonest intention at the very inception and also for the absence of other ingredients of Section 420 of the Indian Penal Code, as mentioned in this judgment, this Court has no hesitation in holding that the offence punishable under Section 420 of the Indian Penal Code is not made out either. 12. So far as the essential ingredients of the offence punishable under Section 120B of the Indian Penal Code is concerned, the essential ingredients of the said offence are as follows:- (i) An agreement between two or more persons to commit an offence 11 Cr.M.P. No.469 of 2021 (ii) In doing so, either commit or caused to be done an illegal act or act which is not in itself illegal, by illegal means As has been held by the Hon’ble Supreme Court of India in the case of State vs. Nalini reported in (1995) 5 SCC 253 which has been reiterated in the case of Sudhir Shantilal Mehta vs. CBI reported in (2009) 8 SCC 1 as also in the case of Major E.G. Barsay vs. State reported in AIR 1961 SC 1762 as well as Ram Narayan vs. CBI reported in (2003) 3 SCC 641. Further, the other essential ingredients of the offence punishable under Section 120B of the Indian Penal Code are that; (iii) such an act done or caused to be done; was an offence punishable under the Indian Penal Code and (iv) If the act so done was not an offence then an overt act had been done by one or more parties to such agreement in pursuance thereof. 13. Now coming to the facts of the case, there is absolutely no allegation against the petitioner of having committed any of the acts, deeds and things to constitute the offence punishable under Section 120B. Under such circumstances, this Court has no hesitation in holding that offence punishable under Section 120B of Indian Penal Code is also not made out in the facts of the case. 14. So far as the offence punishable under Section 467 of the Indian Penal Code is concerned, the essential ingredients to constitute the said offence is that :- 12 Cr.M.P. No.469 of 2021 (i) The accused committed a forgery; (ii) He did so by preparation of forged document which purports to be a valuable security or the documents mentioned in Section 467 of the Indian Penal Code. 15. Now coming to the facts of the case, there is no allegation against the petitioner of forging any document which purports to a valuable security or any other document, referred to in section 467 of the Indian Penal Code. Hence, in the considered opinion of this Court, no offence punishable under Section 467 of the Indian Penal Code is made out. 16. So far as the offence punishable under Section 468 of the Indian Penal Code is concerned, the essential ingredients are that:- (i) There should be a forgery in respect of the document or electronic record in question; (ii) The intention of the forgery should be that the forged document or electronic record is to be used for the purpose of cheating; (iii) There should be forgery with particular intent, as has been held by the Hon’ble Supreme Court of India in the case of Ram Narayan vs. CBI (supra) 17. Now coming to the facts of the case, there is no allegation against the petitioner of committing any forgery nor as already held by this court in the foregoing paragraphs of this judgment, the offence of cheating is not made out nor there is any allegation that forgery was made for the purpose of cheating. Mis-description of a property in the Schedule of an agreement by its boundary or 13 Cr.M.P. No.469 of 2021 otherwise in the absence of any mens rea certainly cannot constitute offence of forgery because dishonest intention in making a false document is the sine qua non for constituting the offence of forgery. As there is no allegation that the petitioner deliberately made any false document with any dishonest intention, in the considered opinion of this Court, the offence punishable under Section 468 of the Indian Penal Code is not made out either. 18. So far as the offence punishable under Section 471 of the Indian Penal Code is concerned, the essential ingredients for the said offence are:- (i) The accused fraudulently and dishonestly used a document or electronic record as genuine; (iv) The accused knew or had reason to believe that the document or the electronic record was a forged one, as has been held by the Hon’ble Supreme Court of India in the case of Ram Narayan vs. CBI (supra) 19. Now coming to the facts of the case, there is no allegation against the petitioner of fraudulently or dishonestly using any document or electronic record as genuine and obviously the other essential ingredient that the accused knew or had reason to believe the document to be forged one does not arise. Under such circumstances, this Court is of the considered view that the offence punishable under Section 471 of the Indian Penal Code is also not made out. 14 Cr.M.P. No.469 of 2021 20. The Hon’ble Supreme Court of India has time and again taken note of the fact that the proceedings before the criminal courts are used for settling scores or to pressurize parties to settle civil dispute as has been observed by the Hon’ble Supreme Court of India in the case of Mohammed Ibrahim & Ors. vs. State of Bihar & Anr. (supra) in para -8 of which reads as under:- “8. This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurise parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. (See G. Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] and Indian Oil Corpn. v. NEPC India Ltd. [(2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] ) Let us examine the matter keeping the said principles in mind.” (Emphasis supplied) 21. Now coming to the facts of the case, this Court is of the considered view that the essential ingredients to constitute criminal offence i.e. mens rea is absent. The dispute between the parties is basically a civil dispute but in the absence of any ingredients to constitute the offence for which the F.I.R. has been registered, this Court is of the considered view that the continuation of the criminal proceeding would amount to abuse of process of Court and this is a fit case where in the interest of justice, the entire criminal proceeding including the F.I.R. in connection with Adityapur P.S. Case No. 226 of 2020 registered for the offences punishable under Section 406/420/467/468/ 471/120B of the Indian Penal Code be quashed and set aside, 15 Cr.M.P. No.469 of 2021 more so because undisputedly the petitioner has already returned the advance amount of Rs.3 Crore which he took from the company of the informant –opposite party no.2 during the proceedings of this criminal miscellaneous petition and about which there is no dispute from the side of the opposite party no.2 either. 22. Accordingly, the entire criminal proceeding initiated against the petitioner in connection with Adityapur P.S. Case No. 226 of 2020 registered for the offences punishable under Section 406/420/467/468/471/120B of the Indian Penal Code is quashed and set aside. 23. 24. In the result, this criminal miscellaneous petition is allowed. The learned counsel for the opposite party no.2 submits that the opposite party no.2 is entitled to get some interest upon the advance amount which the petitioner has already returned. 25. In case, the opposite party no.2 is entitled to any interest, he may approach the appropriate court for recovery of the amount, if any, due to him or his company by filing appropriate case. High Court of Jharkhand, Ranchi Dated the 27th June, 2023 AFR/Sonu-Gunjan/- (Anil Kumar Choudhary, J.)