1. Sanjeev Bhandari, aged about 55 years, S/o –Ved Prakash, 2. Priya Bhandari, aged v. 1. The State of Jharkhand 2. Sunil Kumar Shah, S/o –Prabhu Dayal Shah, 1D
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 2186 of 2022 1. Sanjeev Bhandari, aged about 55 years, S/o –Ved Prakash, 2. Priya Bhandari, aged about 48 years, W/o –Sanjeev Bhandari Both are residents of Apartment – 3322, Area –Sector 32-D, Town – Chandigarh, P.O.+P.S. –Sector 30 PO CHD, District/State – Chandigarh, PIN Code -160030 .... Petitioners Versus 1. The State of Jharkhand 2. Sunil Kumar Shah, S/o –Prabhu Dayal Shah, 1D, Rose Valley Apartment, Rameshwaram Galli, Bariatu Road, Morabadi, P.O. and P.S. –Bariatu, District –Ranchi, Jharkhand. …. Opp. Parties P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY ….. For the Petitioners For the State For the O.P. No.2 : Mr. Avilash Kumar, Advocate : Mr. Rajesh Kumar, Advocate : Mr. Karamdeo, Advocate : Mr. Apurwa Pathak, Advocate : Mr. Vishnu Kr. Mahto, Advocate : Mr. Rajeev Kr. Sinha, Advocate : Mr. Satish Prasad, Addl. P.P. : Mr. Ankit Apurva, Advocate : Mr. Prakash Jha, Advocate ….. By the Court:- 1. 2.
Facts
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 First Information Report and the entire criminal proceeding arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019 as also for quashing the order dated 19.07.2022, passed by the learned Chief Judicial Magistrate, Ranchi in G.R. Case No. 2093 of 1 Cr.M.P. No.2186 of 2022 2022 by which the learned Magistrate has taken cognizance of the offences punishable under Section 406/420 of the Indian Penal Code arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019. 3. The allegation against the petitioners is that the petitioners approached the informant posing themselves as owners of M/s Nature Agro Foods and consequent upon negotiation between the informant and the petitioners, the informant was appointed as Super Stockiest for selling the products of the said Nature Agro Foods such as pickles, sauces, jams, squashes, tinned fruits and marmalade (murabba) etc. As the business ran and continued for some time, the petitioners used to pay less amount than the amount due to the informant and in December, 2017 they stopped payment of the informant and they did not make any effort for selling of the stock lying in the godown; which was hired by the informant and also did not pay the rent of the godown taken on rent by the informant, at the behest of the petitioners and a sum of Rs.3,80,994.74 was due and payable to the informant by the petitioners. On the basis of the written report submitted by the informant, police registered Kotwali (Ranchi) P.S. Case No. 189 of 2019 and took up investigation of the case. After completion of the investigation of the case, police submitted charge sheet after finding that the petitioners have committed the offence punishable under Section 406/420 of the Indian Penal Code and the learned Magistrate took cognizance of the said offences vide order dated 19.07.2022. 2 Cr.M.P. No.2186 of 2022 4.
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. 4 Cr.M.P. No.2186 of 2022 7. It is also a settled principle of law as has been reiterated by the Hon’ble Supreme Court of India in the case of Binod Kumar & Ors. Vs. State of Bihar & Anr. reported in (2014) 10 SCC 663, paragraph-18 of which reads as under :-
Arguments
It is submitted by the learned counsel for the petitioners that the dispute between the parties is basically a civil dispute arising out of commercial transaction which was carried on by the petitioners and the informant. It is next submitted that there is no allegation against the petitioners that the petitioners have any intention to cheat the informant since the beginning of the transaction between the parties. It is next submitted that there is no allegation against the petitioners of committing dishonest misappropriation of any entrusted property. Hence, neither the offence punishable under Section 406 nor the offence punishable under Section 420 of the Indian Penal Code is made out against the petitioners; even if the allegations made against the petitioners are considered to be true in their entirety. It is next submitted that though the informant was the Super Stockiest and after the agreement he has to invest in the business to get the good stock of the goods, but he failed to do the same and the informant failed to maintain 21 days’ stock at all the time, which he was duty bound to do as a Super Stockiest. So non-availability of regular stock became a major issue in the business and a cloak of criminal case has been given by the informant to a purely civil dispute. Hence, it is submitted that the prayer as prayed for by the petitioners in this criminal miscellaneous petition be allowed. 5. The learned Addl. P.P. and the learned counsel for the opposite party no.2 on the other hand vehemently opposes the prayer as made in this criminal miscellaneous petition and submits that not 3 Cr.M.P. No.2186 of 2022 paying the amount of money due and payable to the informant and not paying the rent of the godown amounts to cheating. Hence, it is submitted that this criminal miscellaneous petition being without any merit be dismissed. 6. Having heard the submissions made at the Bar and after going through the materials available 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
“18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust.” (Emphasis supplied) in misappropriating intention That To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the accused persons. It must also be shown that the accused persons dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the accused persons did not pay the money to the complainant does not amount to criminal breach of trust. 8. It is also a settled principle of law as has been reiterated by the Hon’ble Supreme Court of India in the case of Delhi Race Club (1940) Ltd. And Ors. Vs. State of Uttar Pradesh and Anr., 5 Cr.M.P. No.2186 of 2022 reported in (2024) SCC Online SC 2248 that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. 9. Now coming to the facts of the case, the very fact that the petitioners and the informant were carrying on business for a considerable period of time and considerable amount of money was also paid by the petitioners to the informant, goes to show that the petitioners had no intention to cheat since the beginning of the transaction between the parties. Hence, in view of the settled principle of law, even if the allegations made against the petitioners are considered to be true in their entirety, still the offence punishable under Section 420 of the Indian Penal Code is not made out against the petitioners. 10. So far as the offence punishable under Section 406 of the Indian Penal Code is concerned, considering the fact that the petitioners have, even admittedly by the informant, supplied the materials for which the informant paid money to the petitioners and in the absence of any specific allegation against the petitioners that the they have committed dishonest misappropriation of any entrusted 6 Cr.M.P. No.2186 of 2022 property, even if the allegations made against the petitioners in the F.I.R., in the case diary and the charge sheet are considered to be true in their entirety, still in the considered opinion of this Court, the offence punishable under Section 406 of the Indian Penal Code is not made out. 11. In view of the discussions made above, as neither the offence punishable under Section 420 nor the offence punishable under Section 406 of the Indian Penal Code is made out against the petitioners, even if the entire allegations are considered to be true in their entirety, this Court is of the considered view that continuation of this criminal proceeding will amount to abuse of process of law and this is a fit case where the First Information Report and the entire criminal proceeding arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019 including the order dated 19.07.2022, passed by the learned Chief Judicial Magistrate, Ranchi in G.R. Case No. 2093 of 2022 by which the learned Magistrate has taken cognizance of the offences punishable under Section 406/420 of the Indian Penal Code arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019 be quashed and set aside qua the petitioners. 12. Accordingly, the First Information Report and the entire criminal proceeding arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019 including the order dated 19.07.2022, passed by the learned Chief Judicial Magistrate, Ranchi in G.R. Case No. 2093 of 2022 by which the learned Magistrate has taken cognizance of the 7 Cr.M.P. No.2186 of 2022 offences punishable under Section 406/420 of the Indian Penal Code arising out of Kotwali (Ranchi) P.S. Case No. 189 of 2019 is quashed and set aside qua the petitioners. 13. In the result, this criminal miscellaneous petition is allowed. High Court of Jharkhand, Ranchi Dated the 19th November, 2024 AFR/Sonu-Gunjan/- (Anil Kumar Choudhary, J.) 8 Cr.M.P. No.2186 of 2022