Nidhi Gupta, aged about 50 years, daughter of late Shri N.P. Gupta, resident of v. 1. The State of Jharkhand 2. Abhay Ranjan Prasad Srivastava, aged about 53 years
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 3448 of 2021 Nidhi Gupta, aged about 50 years, daughter of late Shri N.P. Gupta, resident of W-20, Greater Kailash Part-II, Greater Kailash S.O., South Delhi, P.O.-Greater Kailash, P.S.-Greater Kailash, New Delhi-110048. .... Petitioner Versus 1. The State of Jharkhand 2. Abhay Ranjan Prasad Srivastava, aged about 53 years, son of Sri Priya Ranjan Prasad Srivastava, resident of Flat No.101, Krishna Apartment, Tetulia PCC Road, Bari Co-operative Colony, P.O.- Sector-12, P.S.-Sector-12, Dist.-Bokaro …. Opp. Parties P R E S E N T
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 Cr.M.P. No.3448 of 2021 2 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) and has reiterated the settled principle of law 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 and in that case also this Court referred to the essential ingredients of the offence punishable under Section 420 of Indian Penal Code in paragraph no.6, which reads as under:- “6. Having heard the rival submissions made at the Bar and after going through the materials available in the record, it is pertinent to mention here that the essential ingredients of the offence punishable under Section 420 of the Indian Penal Code are as follows:- (ii) (i) Deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission, 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 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 and Anr., reported in (2009) 8 SCC 751.” Cr.M.P. No.3448 of 2021 3 5. It is next submitted by the learned counsel for the petitioner that in that case, this Court also reiterated the ingredients of the offence punishable under Section 406 of Indian Penal Code by observing thus in paragraph nos.11 and 12 which reads as under:- “11. So far as the offence punishable under Section 406 of the Indian Penal Code is concerned, the essential ingredients to constitute the said offence are:- (i) Mens rea (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 (iii) of the property. The accused dishonestly used or disposed 12. It is a settled principle of law 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 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 simple recognises 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. (Emphasis supplied) difference between a that 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 of the Indian Penal Code for which punishment has been provided in Section 406 of the Indian Penal there being a clear case of Code without entrustment.” Cr.M.P. No.3448 of 2021 4 6. Learned counsel for the petitioner next relied upon the judgment of Hon’ble Supreme Court of India in the case of Ravindranatha Bajpe vs. Mangalore Special Economic Zone Ltd. & Ors. reported in 2021 SCC OnLine SC 806, wherein, the Hon’ble Supreme Court of India relied upon its judgment in the case of Sunil Bharti Mittal Vs. CBI reported in (2015) 4 SCC 609 wherein, the Hon’ble Supreme Court of India has laid down the circumstances when Director/person in charge of the affairs of the company can also be prosecuted, when the company is an accused person and submits that in paragraph no.43 thereof which reads as under:- “43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.” it has been held by the Hon’ble Supreme Court of India that an individual who has perpetrated the commission of any offence on behalf of the company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent and in this case undisputedly, since the petitioner was no more the director of the company concerned on the alleged date of entrustment of the rubber sheets hence, by no stretch of imagination, it can be said that the petitioner perpetrated the commission of the offence on behalf of the company. Cr.M.P. No.3448 of 2021 5 7. Learned counsel for the petitioner next relied upon the judgment of Vinod Natesan vs. State of Kerala & Ors. reported in (2019) 2 SCC 401, paragraph no.10 of which reads as under:- “10. xxxx xxxx xxxx xxxx Even considering the allegations and averments made in the FIR and the case on behalf of the appellant, it cannot be said that the ingredients of Sections 406 and 420 are at all satisfied. The dispute between the parties at the most can be said to be the civil dispute and it is tried to be converted into a criminal dispute. Therefore, we are also of the opinion that continuing the criminal proceedings against the accused will be an abuse of process of law and, therefore, the High Court has rightly quashed the criminal proceedings. Merely because the original accused might not have paid the amount due and payable under the agreement or might not have paid the amount in lieu of one month’s notice before terminating the agreement by itself cannot be said to be a cheating and/or having committed offence under Sections 406 and 420 IPC as alleged. We are in complete agreement with the view taken by the High Court.” and submits that the dispute between the parties is a civil dispute and it is tried to be converted into a criminal dispute which is evident from the legal notice sent by the informant to the Vice President of M/s. Indure Private Limited wherein, it has been mentioned that unless the outstanding dues of complainant- informant is settled within 21 days of receipt of notice, the complainant-informant will have no alternative other than to file recovery suit with damage making NTPC too in array of party under MSME Act. 8. Hence, it is submitted that continuation of the criminal proceeding will amount to abuse of process of law and therefore, the entire criminal proceeding of Balidih P.S. Case No. 27 of 2020 arising out of Complaint Case No. 108 of 2020 be quashed and set aside. Cr.M.P. No.3448 of 2021 6 9. Learned Special Public Prosecutor and the learned counsel for the opposite party no.2 on the other hand opposes the prayer to quash the entire criminal proceeding of Balidih P.S. Case No. 27 of 2020 arising out of Complaint Case No. 108 of 2020. Learned Spl. P.P. and the learned counsel for the opposite party no.2 did not dispute the fact that the petitioner retired from the directorship of the company concerned being M/s. Indure Private Limited with effect from 05.04.2017 before the alleged entrustment of rubber sheets, the payment of which has not been made. Hence, it is submitted that this criminal miscellaneous petition being without any merit be dismissed. 10. Having heard the submissions made at the Bar and after going through the materials in the record, it is pertinent to mention here that there is no allegation against the petitioner of having any intention to deceive since the very inception of the transaction between the parties rather it is the case of the company in which the petitioner was the director that since the goods supplied were not up to the required standard and the work done was not satisfactory hence, the payment was not made. 11. Under such circumstances, this Court is of the considered view that even if the entire allegation made against the petitioner are considered to be true still neither the offence punishable under Section 420 of Indian Penal Code nor the offence punishable under Section 406 of Indian Penal Code or for that matter the offence punishable under Section 120B of Indian Penal Code is made out. Cr.M.P. No.3448 of 2021 7 12. Hence, continuation of the criminal proceeding against the petitioner will amount to abuse of process of law. Therefore, this is a fit case where the entire criminal proceeding of Balidih P.S. Case No. 27 of 2020 arising out of Complaint Case No. 108 of 2020 be quashed and set aside qua the petitioner only. 13. Accordingly, the entire criminal proceeding of Balidih P.S. Case No. 27 of 2020 arising out of Complaint Case No. 108 of 2020 is quashed and set aside qua the petitioner only. 14.
Arguments
HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY ….. For the Petitioner For the State For O.P. No.2 : Mr. Indrajit Sinha, Advocate : Mr. Sagar Kumar, Advocate : Mr. Kashish Tiwary, Advocate : Mrs. Nehala Sharmin, Spl. P.P. : Mr. Raja Ravi Shekhar Singh, Advocate ….. By the Court:- 1. 2. 3. 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 of Balidih P.S. Case No. 27 of 2020 arising out of Complaint Case No. 108 of 2020. The allegation against the petitioner is that the petitioner being the director of M/s. Indure Private Limited along with co-accused being Cr.M.P. No.3448 of 2021 1 accused no.1 of the complaint, which upon being referred to police under Section 156 (3) Cr.P.C., the FIR of the case has been registered, has cheated and committed criminal breach of trust by taking supply of rubber sheets worth Rs.7,24,960/- on 06.04.2017 and 19.04.2017 and has not paid the said amount and allowed the said rubber sheets to be used by the co-accused in his factory. 4. It is submitted by the learned counsel for the petitioner by drawing attention of this Court to Annexure-3 series at page no.92 that the petitioner has resigned from the said company as director on 31.03.2017 and the effective date of registration is 05.04.2017 i.e. before the alleged entrustment of rubber sheets hence, there is no allegation of any entrustment or delivery of any property to the petitioner; therefore neither the offence punishable under Section 420 or the offence punishable under Section 406 of Indian Penal Code is made out nor any offence of criminal conspiracy is made out against the petitioner. It is next submitted by the learned counsel for the petitioner by relying upon the judgment of this Court in Cr.M.P. No.256 of 2021 dated 24.01.2024 in the case of Anima Prasad & Ors. vs. The State of Jharkhand & Anr. that therein this Court relied upon the judgment of 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
In the result, this criminal miscellaneous petition is allowed. High Court of Jharkhand, Ranchi Dated the 8th May, 2024 AFR/Sonu-Gunjan/- (Anil Kumar Choudhary, J.) Cr.M.P. No.3448 of 2021 8