Mithilesh Kumar Pandey @ Mithilesh Pandey v. The State of Jharkhand

HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY By the Court:- Heard the parties.

This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, with the prayer to set aside the order taking cognizance dated 26.10.2022 against the petitioner in connection with Bariatu P.S. Case No. 128 of 2022 whereby and whereunder cognizance has been taken under Sections 406, 420, 467, 468, 471 and 34 of the Indian Penal Code, which is now pending in the Court of learned Judicial Magistrate, Ranchi. 1 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262)

The allegation against the petitioner is that the brother of the petitioner namely, Yogendra Kumar Pandey with deceitful and ulterior motive to cheat, approached the complainant – informant to sale a land, entered into an agreement and the only allegation against this petitioner is that a part of the advance amount of Rs. 4,00,000/- was paid to the account of the petitioner. The co-accused brother of the petitioner namely, Yogendra Kumar Pandey received in total Rs. 22,00,000/- from the complainant including Rs. 4,00,000/- which was transferred to the account of the petitioner but did not execute the sale deed.

It is submitted by the learned counsel for the petitioner by relying upon the judgment passed by this Court in Cr. M. P. No. 332 of 2022 [Puran Chandra Poddar Vs. The State of Jharkhand & Another], dated 30th October 2023 that therein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Sarabjit Kaur Vs. State of Punjab & Another reported in 2023 5 SCC 360, Paragraph no. – 13 of which reads as under : -

13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal courts are not meant to be used for settling scores filed with 2 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262) or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.

(Emphasis supplied) wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that unless fraudulent and dishonest intention is shown right at the beginning of the transaction, a breach of contract will not give rise to a criminal proceeding.

It is next submitted that in that case, this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the Case of Uma Shankar Gopalika Vs. State of Bihar & Another reported in (2005) 10 SCC 336, Paragraph no. – 6 of which reads as under: -

Xxxx xxxx xxxx 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) Wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that every breach of contract would not give rise to an offence of cheating and only on those cases breach of contract would amount to the offence of 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. 3 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262)

6. It is also submitted that in that case this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the case of Satishchandra Ratanlal Shah Vs. State of Gujarat & Another reported in (2019) 9 SCC 148, Paragraph no. – 11 of which reads as under:- “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. Wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that mere breach of a promise, agreement or contract does not ipso facto constitute the offence of criminal breach of trust as contained under Section 405 of the Indian Penal Code without there being a clear case of entrustment.

It is next submitted by the learned counsel for the petitioner that the allegation against the petitioner is false and the account in which Rs. 4,00,000/- was deposited, was the joint account of the petitioner and his brother namely Yogendra Kumar Pandey. It is next submitted that the petitioner has been roped in, in this case only in order to humiliate and harass him as well as to cause mental agony to him; with the oblique purpose. It is then submitted that in fact, Rs. 4,00,000/- was paid to the brother of the petitioner, namely, Yogendra 4 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262) Kumar Pandey. It is next submitted that a stamp against pre-registration sale deed was purchased in the name of the wife of the complainant, namely, Krishna Devi and the sale deed was executed through power of attorney holder in the name of Krishna Devi for the consideration amount of Rs. 27,06,000/- and the brother of the petitioner, namely, Yogendra Kumar Pandey paid the said consideration amount of the said sale deed, to the power of attorney holder. He further submits that the informant – complainant has not come to the Court with clean hands and has suppressed the material facts that the complainant has to pay Rs. 36,00,000/- for full and final consideration amount. It is next submitted that admittedly an agreement was entered into between son of the complainant, namely Niraj Dhar Dubey and the brother of the petitioner, namely, Yogendra Kumar Pandey and the petitioner is in no way concerned with the transaction between brother of the informant and the family members of the complainant. As per agreement, sale deed has been executed. There is no allegation against the petitioner of having any knowledge about Sanjay Singh- the power of attorney holder, having created any forged document of power of attorney. The allegation of impersonation of the executor of the said power of attorney, namely, Savitri Devi, the need of whom executing the power of attorney arose, as her husband Harihar Sahu died after entering into the agreement with the brother of the petitioner, is not upon the petitioner.

It is next submitted that the brother of the petitioner, namely, Yogendra Kumar Pandey was having perfect title and interest for the sale of the land to the complainant. The son of Savitri Devi, namely, Ishwar Chandra Prasad filed fraudulent registration case no. 41 of 2020-2021 against the wife of the complainant and others in which the Deputy Commissioner, Ranchi, directed 5 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262) Deputy Registrar to lodge FIR but the said order of the Deputy Commissioner has been quashed and set aside by the co-ordinate bench of this Court in W.P.(C). No. 904 of 2022 vide order dated 11th January 2024.

It is next submitted that even if the entire allegation made against the petitioner is considered to be true in its entirety, none of the offences in respect of which the cognizance has been taken by the learned Judicial Magistrate, Ranchi, is made out against the petitioner. Hence, it is prayed that the prayer as prayed for in this criminal miscellaneous petition, be allowed.

Learned Addl. P.P. as well as learned counsel for the Opp. Party No. 2 on the other hand vehemently opposes of the prayer of the petitioner made in this Cr.M.P. by relying upon the judgment of the Hon’ble Supreme Court of India in the case of Mohammed Ibrahim & Others Vs. State of Bihar & Another reported in (2009) 8 SCC 751 submits that therein it was held that necessary ingredients to constitute the creation of a false document is that it should have been made with the intention of causing it to be believed that such document was made or executed by, or by the authority of a person, by whom or by whose authority he known that it was not made or executed. It is further submitted that Rs. 4,00,000/- was transferred in the individual account of the petitioner and since the petitioner also assured the complainant that documents of the petitioner shown by his brother, are genuine, so he is squarely responsible for commission of the offences, in respect of which cognizance has been taken by the learned Judicial Magistrate. Hence, it is submitted that at this nascent stage, the entire criminal proceeding ought not be quashed and set aside and this Cr.M.P. being without any merit, be dismissed. 6 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262)

Learned counsel for the Opp. Party No. 2 fairly submits that the Opp. Party No. 2 suppressed the fact that there was execution of a sale deed at the behest of the brother of the petitioner by one Sanjay Singh in favour of the wife of complainant but the said sale deed was executed for a plot number different from the plot in respect of which the son of the complainant and brother of the petitioner entered into an agreement.

Having heard the submissions at the bar and after going through the materials available on record, it is pertinent to mention here that it has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika (supra), that the sine-qua-non to constitute the offence punishable under Section 420 of the Indian Penal Code is that, the accused person must have played deception at the beginning of the transaction between the parties.

Now coming to the facts of this case, the allegation of playing of deception has been confined only to the brother of the petitioner, namely, Yogendra Kumar Pandey, made in para – 4 of the complaint, which complaint upon being referred to Police under Section 156 (3) of the Cr.P.C., FIR, of this case has been registered.

There is absolutely no allegation against the petitioner of playing deception at the beginning of the transaction between the parties. Under such circumstances, this Court has no hesitation in holding that even if the entire allegation made against the petitioner, is considered to be true in its entirety, still the offence punishable under Section 420, is not made out.

So far as the offence punishable under Section 406 of the Indian Penal Code is concerned, it is a settled principle of law that if the dispute between the parties was essentially a civil dispute resulting from the breach of contract on 7 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262) the part of the accused person by non-refunding of the advance amount, the same would not constitute an offence of cheating and similar is the legal position in respect of the offence of criminal breach of trust, as has been held by the Hon’ble Supreme Court of India in the case of Dalip Kaur & Others Vs. Jagnar Singh & Others reported in (2009) 14 SCC 696, Paragraph no. 10 of which reads as under:-

10. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code. (See Ajay Mitra v. State of M.P. [(2003) 3 SCC 11: 2003 SCC (Cri) 703])

(emphasis supplied)

Now coming to the facts of this case at best the case that is made out against the petitioner is that the petitioner has received part of the advance amount for selling of the land, which he did not return.

Of course, it is the admitted case of the complainant that complainant has not come to the Court with clean hands by suppressing the material facts that a sale deed was executed at the behest of the brother of the petitioner by one Sanjay Singh in favour of the wife of the complainant but even assuming for the sake of the argument that the petitioner has not returned part of the advance amount of Rs. 4,00,000/- that itself will not constitute the offence punishable under Section 406 of the Indian Penal Code; in view of the principle of law settled in the case of Dalip Kaur & Others Vs. Jagnar Singh & Others (supra). So far as the offence punishable under Section 467, 468 and 471 of the 8 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262) Indian Penal Code is concerned in order to constitute those offences, the essential ingredient is forgery, by creation of false document mentioned in Section 464 of the Indian Penal Code.

There is absolutely no allegation against the petitioner of having knowledge of any forged document being created nor is there any allegation of his being instrumental in creation of any forged document. So, even if the entire allegation made against the petitioner is considered to be true in its entirety, still the offence punishable under said sections, to constitute which offences commission of forgery is essential, is not made out against the petitioner. In the absence of offence of forgery, none of the offences punishable under Sections 467, 468 and 471 of the Indian Penal Code, is made out against the petitioner.

In view of the discussions made above, as none of the offence in respect of which the cognizance has been taken by the learned Judicial Magistrate, Ranchi, is made out against the petitioner even if the entire allegation made against him are considered to be true, this Court is of the considered view that the continuation of criminal proceeding against the petitioner will amount to an abuse of process of law. Therefore, it is a fit case where the order taking cognizance dated 26.10.2022 in connection with Bariatu P.S. Case No. 128 of 2022, whereby and whereunder cognizance has been taken under Sections 406, 420, 467, 468, 471 and 34 of the Indian Penal Code, be quashed and set aside.

Accordingly, the order taking cognizance dated 26.10.2022 in connection with Bariatu P.S. Case No. 128 of 2022 whereby and whereunder cognizance has been taken under Sections 406, 420, 467, 468, 471 and 34 of the Indian Penal Code, is quashed and set aside qua the petitioner. 9 Cr. M. P. No. 946 of 2023 (2025:JHHC:33262)