Ashok Kumar v. State of Uttarakhand and Another

Judgment

1. The present application under Section 482 of the Code of Criminal Procedure, 1973, has been filed by the applicant, Ashok Kumar, seeking quashing of the charge-sheet dated 19.03.2018 submitted in Case Crime No. 67 of 2018 under Section 420 IPC, Police Station Kotwali Manglaur, District Haridwar, and the cognizance order dated 28.06.2018 passed by the learned Judicial Magistrate, Roorkee, District Haridwar, in Criminal Case No. 608 of 2018, as well as all proceedings arising therefrom.

The facts of the case, briefly stated, are that an FIR was lodged by the respondent no.2, Munesh Kumar, on 01.02.2018, alleging that the applicant had entered into an agreement for sale of eight bighas of land at the rate of Rs.1,00,000/- per bigha and accepted Rs.50,000/- as earnest money. It was further alleged that the applicant demanded an additional Rs. 2,00,000/- on the pretext of giving the amount to his relative, and this sum was also paid in the presence of two witnesses. However, when the informant demanded execution of the sale deed, the applicant allegedly refused to do so and declined to return the money. Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 1 Ashish Naithani J.

3. Learned counsel for the applicant submits that the entire dispute is of a civil nature, arising out of an agreement for the sale of land. It is contended that even if the allegations in the FIR are taken at face value, no offence under Section 420 IPC is made out, as there is no material to show that the applicant had fraudulent intent from the inception of the transaction.

4. It is argued that the applicant is the recorded tenure holder of the land in question, as evidenced by the Khatauni, and there is no dispute regarding ownership of the land. It is further submitted that the applicant has already returned the earnest money to the informant, and the FIR has been lodged with a mala fide intent to harass the applicant. The learned counsel further contends that the FIR is a counterblast to a purely civil dispute and has been filed to exert undue pressure upon the applicant.

5. The applicant’s counsel further argues that the investigation has been conducted in a mechanical manner without independent corroboration, relying solely upon the statements of the informant and witnesses, who are interested parties. It is contended that the State has failed to appreciate that the transaction pertains to immovable property, which is governed by the Transfer of Property Act and Specific Relief Act, and the appropriate remedy, if any, lies in the civil court.

6. The learned counsel also draws attention to the procedural lapse in the applicant's arrest without compliance with the guidelines laid down by the Hon'ble Supreme Court in Arnesh Kumar v. State of Bihar. It is submitted that the criminal process has been misused as a means of arm-twisting in a civil dispute, which amounts to abuse of the process of law. Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 2 Ashish Naithani J.

7. Per contra, learned State counsel opposes the application and submits that the allegations in the FIR, as well as the material collected during the investigation, disclose the commission of a cognizable offence under Section 420 IPC. It is contended that the applicant, with dishonest intent, induced the informant to part with a sum of Rs.2,50,000/- under the pretext of executing a sale deed but subsequently refused to honour the agreement, thereby cheating the informant.

8. The State further contends that the payment of money is supported by a written receipt dated 23.11.2017, signed by both parties in the presence of two witnesses, Sher Singh and Sunil Bawra. It is argued that the applicant's denial of execution of the receipt, after having earlier admitted it, itself points to a fraudulent intention. The learned counsel for the State submits that the learned Magistrate, after due application of mind, has rightly taken cognizance.

10. Heard learned Counsel for the Parties and Perused the Records. The issues raised in this case necessitate a careful distinction between a purely civil dispute and a case where criminal liability may arise. The fundamental question is whether the allegations in the FIR, taken at face value, constitute an offence under Section 420 IPC, or whether the proceedings amount to an abuse of process.

11. It is trite law that the essential ingredients of the offence of cheating under Section 420 IPC are: (i) deception of any person, (ii) fraudulently or dishonestly inducing that person to deliver any property, and (iii) a dishonest intention from the very inception of the transaction. In the present case, the FIR alleges that the applicant received a sum of Rs.2,50,000/- towards the sale of land but later refused to execute the sale deed. Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 3 Ashish Naithani J.

12. However, no specific averment or material is indicating that the applicant had no intention of selling the land at the time of entering into the agreement. The allegations, at best, suggest a breach of contractual terms, which, by itself, does not amount to cheating unless the fraudulent intent is present from the beginning.

13. The law on this point has been clearly laid down by the Hon'ble Supreme Court in M/s Indian Oil Corporation v. NEPC India Ltd., (2006) 6 SCC 736, wherein it was held that a mere breach of contract does not constitute an offence of cheating. The Court observed: "It is to be borne in mind that the distinction between breach of contract and cheating is a fine one. It depends upon the intention of the accused at the time of the alleged inducement, which the prosecution must establish. Mere failure to keep up a promise subsequently cannot be presumed as an act leading to cheating."

14. Similarly, in Anil Kapoor v. Ramesh Chandra, (2012) 10 SCC 348, the Hon'ble Supreme Court reiterated that: "A civil dispute should not be given the cloak of a criminal offence merely to arm-twist the other party compliance. The criminal process cannot be permitted to degenerate into a tool for harassment in civil disputes."

15. In the present case, the transaction relates to an agreement for the sale of immovable property, a subject governed by the provisions of the Transfer of Property Act, 1882, and the Specific Relief Act, 1963. The proper remedy for the informant, if aggrieved by the non-execution of the sale deed, lies in filing a civil suit for specific performance or for recovery of money, and not by invoking the criminal process. Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 4 Ashish Naithani J.

16. The State, has primarily relied upon the receipt of Rs.2,50,000/- and the statements of the informant and witnesses recorded under Section 161 Cr.P.C. However, the fact that there is a written receipt does not by itself establish an offence of cheating. The receipt evidences the transaction but does not, without more, prove a dishonest or fraudulent intention from the inception. The applicant’s denial of the signature on the receipt, though inconsistent, is a matter to be tested in civil proceedings, if necessary.

17. The procedural lapses in the arrest of the applicant, as pointed out by the applicant, also merit attention. In Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273, the Hon'ble Supreme Court has laid down mandatory guidelines for arrest in cases where the offence is punishable with imprisonment up to seven years. It is well settled that arrest is not to be made in a routine manner, and the State must justify the necessity of arrest based on the parameters laid down by the Court. The record in the present case suggests that the applicant was arrested immediately upon registration of the FIR without compliance with these safeguards, which amounts to a violation of the applicant’s fundamental rights.

18. The submission of the State that the applicant’s conduct indicates a fraudulent intention is based solely on the sequence of events but is not supported by any independent or objective material. The mere non- performance of a contract, or even a denial of a receipt, does not establish criminal culpability unless it is shown that the intent to deceive was present at the inception of the transaction.

19. The Hon’ble Supreme Court in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, has enumerated categories of cases where criminal proceedings are liable to be quashed under the inherent powers of the High Court. One such category is where the allegations, even if Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 5 Ashish Naithani J. taken at face value, do not disclose any offence and the proceedings are manifestly an abuse of process of law. This case squarely falls within that category.

20. In view of the above discussion, this Court is of the considered view that the continuation of proceedings against the applicant would amount to harassment and abuse of process of law. The ingredients of Section 420 IPC are not made out in the facts of the present case, and the matter is purely civil in nature. ORDER Accordingly, the application is allowed. The charge-sheet dated

19.03.2018 submitted in Case Crime No. 67 of 2018 under Section 420 IPC, Police Station Kotwali Manglaur, District Haridwar, the order of cognizance dated 28.06.2018 passed by the learned Judicial Magistrate, Roorkee, District Haridwar, in Criminal Case No. 608 of 2018, and all proceedings arising therefrom are hereby quashed. (Ashish Naithani J.) Dated:02.06.2025 NR/ Criminal Misc. Application No.326 of 2019, Ashok Kumar Vs State of Uttarakhand and Anr - 6 Ashish Naithani J.