The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.3445 of 2015 Shri Girija Sankar Mishra and Others …. Petitioners Mr. Prafulla Kumar Rath, Advocate -Versus- State of Odisha …. Opposite Party Mr. T.K. Praharaj, SC CORAM: JUSTICE R.K. PATTANAIK DATE OF JUDGMENT:30.01.2023 1. In the instant case, the petitioners by invoking inherent jurisdiction of this Court under Section 482 Cr.P.C. have pleaded for quashing of the FIR corresponding to Airfield P.S. Case No.155 of 2015 in connection with C.T. Case No.2919 of 2015 on the grounds inter alia that no any case punishable under Section 420 I.P.C. is prima facie made out by considering the FIR and therefore, it is not tenable in law. 2. In fact, an FIR was lodged on 27th June, 2015 with the allegation that the petitioners cheated the informant and her husband for an amount of Rs.1.20 crore and misappropriated the same and in that connection, certain cheques were issued which stood dishonored after being presented before the Bank whereafter despite repeated demands, the amount which was received towards private loan was not refunded. With the
Facts
above allegations, the FIR was lodged consequent upon which Airfield P.S. Case No.155 of 2015 under Section 420 and 506 read with Section 34 IPC was registered. The aforesaid lodging of the report and registration of a criminal case is under CRLMC No.3445 of 2015 Page 1 of 8
Legal Reasoning
do not make out a prima facie case against the petitioners. 3. Heard Mr. Rath, learned counsel for the petitioners and Mr. Praharaj, learned SC for the State. 4. Mr. Rath, learned counsel for the petitioners submits that the dispute between the parties is principally based on dishonor of cheques for the alleged amount of Rs.1.20 crore but by attributing malafide and bad intent against the petitioners while receiving the payments towards loan and not having refunded the same, such an FIR was lodged, inasmuch as, it is not a case of cheating and hence, Airfield P.S. Case No.155 of 2015 could not have been registered under Section 420 IPC. While contending so, Mr. Rath placed reliance on a decision of the Supreme Court in the case of G. Sagar Suri Vrs. State of U.P. and Others (2000) 2 SCC 636 to contend that when an offence under Section 138 of the N.I. Act is alleged to have been committed by the petitioners, they cannot be criminally prosecuted for cheating under Section 420 IPC. In other words, according to Mr. Rath, such a criminal prosecution for an offence of cheating punishable under Section 420 IPC is not maintainable morefully when a case of dishonor of cheques is principally made out. Mr. Rath submits that when a proceeding under Section 138 of the N.I. Act has been initiated for the self- same cause of action, a prosecution for an offence under Section 420 IPC would be an abuse of the process of law. Mr. Rath, learned counsel for the petitioners also referred to the following decisions in S. Jayaswami and Another Vrs. State of Orissa and Another 2005 (1) OLR 384 and Ananda Mohata Vrs. State of NCT of Delhi (2019) 11 SCC 706 and would contend that for a dispute of civil nature, the present criminal proceeding cannot be sustained in law. In essence, the CRLMC No.3445 of 2015 Page 2 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha argument of Mr. Rath, learned counsel for the petitioners is that the proceeding in connection with C.T. Case No.2919 of 2015 on the grounds raised is not maintainable. 5. Mr. Praharaj, learned counsel for the State on the other hand submits that since the petitioners did not refund the money and considering their conduct which is being alleged, there was no intention for repayment rather the informant and her husband were misbehaved and even threatened. It is contended that by looking at the very conduct of the petitioners, intention to defraud the informant for an amount of Rs.1.20 crore is loud and clear which is revealed from the FIR and hence, the initiation of the criminal action against them for an offence under Section 420 IPC is absolutely justified and thus, calls for no interference. A decision in Priti Saraf and Another Vrs. State of NCT of Delhi and Another reported in 2021 SCC Online SC 206 is cited by Mr. Praharaj to contend that inherent jurisdiction of the Court should not be exercised in the present facts and circumstances of the case on the ground of absence of any intention to cheat the informant and her husband and for the dispute to be civil in nature which would be a defence for the petitioners to take during and in course of trial. 6. A copy of the FIR is at Annexure-1 and its contents are gone through. The details of the transaction between the parties stand described in Annexure-1. The purpose for which the loan was advanced by the informant and her husband have also been narrated in the FIR and regarding issuance of cheques dated 27th and 29th April, 2015 and 1sst May, 2015 and thereafter, its dishonor besides the conduct of the petitioners towards the end. As per Annexure-1, the liability was denied by the petitioners though there was an understanding between the CRLMC No.3445 of 2015 Page 3 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha parties to discharge the same and in that respect, the alleged cheques were issued. It is not in denial that complaints in ICC Nos.1609, 1610 and 1636 of 2015 have been filed against the petitioners under Section 138 of the N.I. Act when the cheques stood dishonored. Now, the question is, whether, under the above circumstances, a criminal proceeding under Section 420 IPC can be sustained in law? 7. The Court is well aware of the powers and limitations in exercise of its inherent jurisdiction under Section 482 Cr.P.C. In fact, the Apex Court in State of Haryana and Others Vrs. Ch. Bhajan Lal and Others 1992 Supp.(1) SCC 335 elaborately discussed and illustratively laid down the grounds and situations where criminal proceedings may be quashed. It has been held therein that if no case is made out or commission of cognizable offence disclosed even by considering the FIR or complaint, or the allegations are absurd and inherently improbable, or where the prosecution is malicious, such jurisdiction may have to be exercised and not otherwise. It is also a settled law that a civil litigation painted with a brush of criminality and a prosecution launched should be interfered with as it would amount to an abuse of process of law. 8. In the present case, according to the petitioners, there was no intention to cheat and hence, an offence under Section 420 IPC is not made out and the criminal prosecution for the same is not maintainable. Referring to the decision in Sagar Suri (supra), it is contended that when the complaints under Section 138 of the N.I. Act are already pending on the same cause of action, the FIR and the criminal prosecution under Sections 406 and 420 IPC would amount to abuse of process of law. By placing reliance on S. Jayaswami (supra), as according to Mr. Rath, the allegations of bouncing of cheques and issues CRLMC No.3445 of 2015 Page 4 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha involved between the parties to be covered in the complaint proceedings and any prosecution for an offence under Section 420 IPC would be an abuse of process of law and that apart, no specific instances have been pleaded on existence of the malafide intention since inception and hence, police investigation during the pendency of the complaints under Section 138 of the N.I. Act should not be allowed to continue. 9. An amount of Rs.1.20 crore was allegedly received by the petitioners. Furthermore, the cheques were issued for the said amount and the same did bounce back. Such a huge amount was given in loan to the petitioners for being utilized in the purchase of machinery for a hospital as it is made to appear from the FIR. The continuous dialogue between the parties as to the payment and refund is narrated in the FIR. Under the above background facts, the question is that whether a case of cheating is really made out. For such an offence, necessary intention is to be attributed. It is also required to be shown that the mens rea was there since the beginning to cheat or defraud the informant. But if it is pure and simple a case with no such intention to cheat from the inception, no case under Section 420 IPC can be said to have been made out. A civil consequence on account of a default cannot take the colour of criminal liability in absence of any such intention. It would, therefore, depend on the facts of each particular case to arrive at a conclusion if an exception is carved out to claim exemption from prosecution for an offence of cheating. 10. As per the FIR (Annexure-1), petitioner No.1 received money from the informant and her husband on different occasions with a total amount of Rs.1.2 crore and by the time the report was lodged, two years had already elapsed and despite repeated requests, the repayment could not be made CRLMC No.3445 of 2015 Page 5 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha and finally the incident took an ugly turn leading to the lodging of the report with the local police. In fact, the informant’s husband was approached by petitioner No.1 with a business proposal to establish a hospital and from time to time as per the demands, the payments were made. According to Annexure-1, initially payment was received in connection with a hotel business and thereafter, for a hospital at Bhubaneswar and having handed over the entire amount, refund was demanded which petitioner No.1 could not ensure as the cheques failed to be honoured which then resulted in the filing of complaints. Considering the above facts, the Court is to examine as to if an offence under Section 420 IPC can be made out against the petitioners including petitioner No.1, who stated to have received the amount in the shape of hand loans from the informant and her husband. From Annexure-1, the Court does not find any instances described as to the conduct of petitioner No.1 in particular to suggest that he had the intention to defraud the informant from the very beginning. It was with an understanding between the parties that the hand loan was obliged and received as they are known to each other and in a way related. In G. Sagar Suri (supra), in a similar case of loan being not paid back, FIR was lodged alleging offences under Sections 406 and 420 IPC and therein the Apex Court quashed the criminal proceeding when inherent jurisdiction under Section 482 Cr.P.C. was declined to be exercised. In the said case, an omnibus allegation was made that with dishonest intention and misrepresentation, the loan was obtained without being any specific roles alleged against the accused and furthermore, when a complaint under Section 138 of the NI Act was already pending. In S. Jayaswami (supra), this Court, in absence of any instances pleaded about existence of malafide intention, concluded that the allegations later to the bouncing CRLMC No.3445 of 2015 Page 6 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha of cheques and related issues would have to be covered in the proceeding under Section 138 of the NI Act and for that matter, prosecution for an offence under Section 420 IPC during the pendency of the complaint cases and the police investigation in that regard would be an abuse of process of law and court. 11. In the case at hand, petitioner No.1 did not deny the liability but as it appears from Annexure-1, when the relationship between him and the informant deteriorated, the same was disclaimed while the latter had approached the former for repayment of the loan amount. Nowhere, it is alleged that petitioner No.1 had the intention not to refund the money and it was from the beginning nor any instances have been pleaded. Rather, the informant received the cheques from petitioner No.1 which, however, could not be encashed leading to the filing of the complaints. The complaints are stated to be pending, the fact which is revealed from the record. Under such circumstances, by considering the conduct of petitioner No.1, who said to have received the loan amount, the petitioners cannot be alleged of any bad intention to cheat and defraud the informant and her husband. The Court is of the view that the alleged cheques were issued but could not be honoured due to insufficient fund in the account of the drawer and hence, issues involved with regard to the alleged transactions cannot be treated as a criminal conduct in so far as petitioner No.1 is concerned. Keeping in view the settled principles of law, the Court is of the humble opinion that in absence of any such dishonest intention or malafide from the inception to cheat or defraud pleaded and narrated which is apparent on the face of record, a civil liability cannot be turned into a criminal action and any such prosecution for an offence CRLMC No.3445 of 2015 Page 7 of 8 Shri Girija Sankar Mishra & Others Vrs. State of Odisha under Section 420 IPC all the more when complaints under Section 138 of the NI Act are already filed, cannot be allowed to survive and therefore, shall have to be quashed in exercise of its extra-ordinary jurisdiction. So, the inevitable conclusion of the Court is that in the present facts and circumstances of the case, since no case is made out for an offence under Section 420 IPC against the petitioners and more particularly petitioner No.1, who allegedly received the hand loan, the criminal proceeding is to be held as not maintainable. As to the other offence under Section 506 IPC is concerned, it is not clearly alleged in Annexure-1 that the petitioners on any such occasion did administer threat to the informant and her husband. The only complaint is that the petitioners informed the informant not to visit their house demanding the refund of the amount as they are being looked down upon by the neighbours. In view of the above, the Court has no other option except to reach at a conclusion that the criminal proceeding shall have to be terminated. 12. Accordingly, it is ordered.
Arguments
Shri Girija Sankar Mishra & Others Vrs. State of Odisha challenge on the ground that the allegations contained therein
Decision
13. In the result, the CRLMC stands allowed. Consequently, the criminal proceeding arising out of Airfield P.S. Case No.155 of 2015 in connection with C.T. Case No.2919 of 2015 pending in the file of learned S.D.J.M., Bhubaneswar is hereby quashed. (R.K. Pattanaik) Judge U.K. Sahoo/TUDU CRLMC No.3445 of 2015 Page 8 of 8