The High Court quashed proceedings against the petitioner for cheating and criminal breach of trust arising from an alleged oral guarantee in a partnership dispute, finding insufficient evidence of entrustment or personal gain.
Quashing of criminal proceeding and order taking cognizance against the petitioner.
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. M. P. No. 2128 of 2019
Rajesh Srivastava .... .. ... Petitioner(s) Versus 1.The State of Jharkhand. 2.Prabhash Chandra .. ... ...Opp. Party(s)
CORAM : HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
For the Petitioner(s) : Mr. Mukesh Kumar, Advocate Mr. Girish Mohan Singh, Advocate For the State : Mr. Sanjay Kr. Srivastava, APP For the O.P. No.2 : Ms. Surabhi Mishra, Advocate
1. The instant Cr. M. P. has been filed for quashing the entire criminal proceeding including the order taking cognizance dated 27.01.2020 passed by learned CJM, Bokaro, in Chas P.S. Case No.77 of 2019 (G.R. No.111 of 2020) whereby and whereunder cognizance has been taken under Sections 406/ 420/ 34 IPC against the petitioner and others.
2. Main question that has been raised in the instant Cr. M. P. is can a person can be prosecuted for giving an oral assurance on behalf of his brother in a business transaction that in the event of any loss, he will bear the same?
3. Petitioner is the brother of the main accused (Rakesh Ranjan Srivastava) who had entered into a partnership with the informant for carrying out a construction business and in the partnership agreement there was arbitration Clause as well. The allegation against the petitioner is that he had assured the informant that in the event of any loss in the business venture, he would make good the losses.
4. It is submitted by learned counsel for the petitioner that even if these allegations are assumed to be true, no offence under Sections 406/ 420 IPC will be made out as nothing has been entrusted to the Petitioner and there is no document in support of the guarantee extended by the petitioner. Once the business venture failed, the Petitioner has been implicated in the present case only with a view to extort the money.
5. Learned APP for the State assisted by learned counsel for the O.P. No.2 has opposed the quashing petition. It is submitted that on the assurance and inducement extended by the petitioner, the informant had entered into the partnership with his brother and thereafter he suffered a loss to the tune of about Rs.35 to Rs.40 Lakhs.
6. Heard, learned counsel for the parties and perused the materials available on record. This Court is of the view that on these materials, no criminal offence will be made out. Admittedly the Petitioner was not a party to the Partnership agreement, no amount has been received. Informant had entered into Partnership
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with the brother of the Petitioner and it is alleged that he had orally stood as guarantor. From the FIR it is apparent that offer to become a Partner was made by the brother of this Petitioner. There is no allegation that it was this petitioner who personally gained or caused loss to the informant. There is mere allegation that he had extended some oral assurance and the same will not be sufficient for initiating criminal prosecution against him.
Under the circumstances, the entire criminal proceeding including the order taking cognizance dated 27.01.2020 passed by learned CJM, Bokaro, in Chas P.S. Case No.77 of 2019 (G.R. No.111 of 2020) is set aside so far the petitioner (above-named) is concerned.
The instant Cr. M. P. is allowed.
( Gautam Kumar Choudhary, J. )
Sandeep/
Uploaded.
3 issues framed by the court
Whether a person can be prosecuted for giving an oral assurance to bear losses in a business transaction.
Whether oral assurance without a written guarantee amounts to an offence under Sections 406/420 IPC.
Whether a criminal proceeding should be quashed when no amount was received by the petitioner.
1 provisions across 1 enactments
Rajesh Srivastava
The State of Jharkhand
Gautam Kumar Choudhary
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
