Allowed

Kamta Nath Sahay Alias Kamta Sahay v. the State of Jharkhand

Jharkhand HC23 Mar 2023Cr.M.P./69/2022

Case brief

AI extract

What is this about?

In Cr.M.P. No.69 of 2022, the High Court of Jharkhand quashed an order taking cognizance against petitioners charged with cheating. The Court held that without specific allegations of dishonest intent at the inception of the contract, a breach of agreement does not constitute a criminal offence under Section 420 IPC, and continuing proceedings would amount to an abuse of process.

What did the court decide?

Order dated 16.02.2019 passed in Complaint Case No.806 of 2018 is quashed and set aside; interim order, if any, is vacated.

Kamta Nath Sahay Alias Kamta Sahay Vs the State of… — Quashing and FIR | Jharkhand HC (2023)

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Cr. M.P. No.69 of 2022

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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Cr. M.P. No.69 of 2022

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Kamta Nath Sahay @ Kamta Sahay aged about 70 years

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Girish Chandra Sahay @ Girish Sahay aged about 65 years

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Brajnandan Sahay, aged about 58 years

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Vinod Kumar @ Binod Kumar aged about 47 years

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Subodh Sahay @ Subodh Kumar aged about 45 years

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Pramod Narayan aged about 50 years

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All sons of Late Trilok Nath Sahay at present resident of 99 Old

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A.G. Colony, PO : Kadru, P.S. Kadru, District: Ranchi

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… Petitioners

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Versus

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The State of Jharkhand

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Mohd Hasim son of Late Mohd Ismail r/o Village: Binod Mohalla, Sahadat Chowk Ward No.7, P.O. Chatra, P.S. Sadar, District Chatra

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… Opposite Parties

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For the Petitioners : Mr. Binod Kumar Dubey, Advocate For the State : Mr. Vineet Kr. Vashistha, Spl. P.P. For the O.P. No.2 : Mr. Sushant Kr. Sinha, Advocate Mr. Rajiv N. Prasada, Advocate

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P R E S E N T

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HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

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By the Court:- Heard the parties.

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This Cr.M.P. has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash the order dated 16.02.2019 passed in Complaint Case No.806 of 2018 by Chief Judicial Magistrate, Chatra whereby and where under the learned Magistrate has taken cognizance against the petitioners for the offences punishable under Sections 420, 406, and 120B of the Indian Penal Code.

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Cr. M.P. No.69 of 2022

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The allegation against the petitioners is that the petitioners entered into an agreement for sell of the land and the informant gave Rs.3,48,000/-. It was promised by the petitioners that consequent upon the partition of the properties between the petitioners who are the coparceners of the property, the land will be sold to the complainant but the petitioners executed a power of attorney in favour of one Md. Kaushar who sold the land in question through two sale-deeds to two different persons. Hence, it is alleged that the petitioners have cheated and committed a criminal breach of trust.

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It is submitted by the learned counsel for the petitioners that the allegations, at best, amount to breach of contract between the parties but no offence punishable under Sections 420 or 406 read Section 120B of the Indian Penal Code is made out in the absence of any allegation of dishonest or fraudulent intention against the petitioners at the time of the complainant parting with the money. It is next submitted that the complainant is not interested to take back the money as though the petitioners have deposited Rs.1,33,000/- in the trial court in terms of the order dated 24.08.2022 passed in A.B.A. No.6265 of 2022 passed by a co-ordinate Bench of this Court but the said money has not yet been taken back by the complainant and the complainant has also filed Title Suit No.167 of 2018 inter alia against the petitioner in the court of Sub-Judge-I, Chatra with a prayer for declaring the power of attorney executed by the petitioners in favour of Md. Kaushar to be illegal, void and not binding upon the petitioners and decree for specific performance of contract directing the petitioners to execute a registered sale-deed in favour of the complainant and the suit was filed on 30.11.2018. It is next submitted that there is no allegation against any of the petitioners of having taken any specific

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Cr. M.P. No.69 of 2022

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amount and the contention of the complainant regarding entrustment of money, is general and omnibus in nature and vague. Learned counsel for the petitioners relies upon the judgment of Hon’ble Supreme Court of India in the case of V. Ravi Kumar vs. State, Rep. by Inspector of Police, District Crime Branch, Salem, Tamil Nadu & Ors. reported in 2019 (1)JLJR (SC) 221 paragraphs-29, 34 and 37 of which read as under:-

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29. There can be no doubt that a mere breach of contract is not in itself a criminal offence, and gives rise to the civil liability of damages. However, as held by this Court in Mridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr., (2000) 4 SCC 168 the distinction between mere breach of contract and cheating, which is a criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. In this case, in the FIR, there were allegations of fraudulent and dishonest intention including allegations of fabrication of documents, the correctness or otherwise whereof can be determined only during trial when evidence is adduced.

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34. In Vesa Holding (P) Ltd. (supra), this Court found that there was nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat, which was a condition precedent for an offence under Section 420 IPC. The complaint was found not to disclose any criminal offence at all.

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37. In this case, it cannot be said that there were no allegations which prima facie constitute ingredients of offences under Sections 420, 409 and 34 of the Indian Penal Code in complaint. There were clear allegations of fraud and cheating which prima-facie-constitute offences under Section 420 of the Indian Penal Code. The correctness of the allegations can be adjudged only at the trial when evidence is adduced. At this stage, it was not for the High Court to enter into factual arena and decide whether the allegations were correct or whether the same were a counter-blast to any proceedings initiated by the respondents. (Emphasis supplied)

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and submits that no offence punishable under Section 406 or 420 read with

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120B of the Indian Penal Code is made out

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Learned counsel for the petitioners next relies upon the judgment of Hon’ble Supreme Court of India in the case of International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) & Others

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Cr. M.P. No.69 of 2022

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vs. Nimra Cerglass Technics Private Limited & Another reported in (2016) 1

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SCC 348 paragraph-13 of which reads as under:-

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13. The legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is, as to whether uncontroverted allegations as made in the complaint establish the offence. The High Court being superior court of the State should refrain from analysing the materials which are yet to be adduced and seen in their true perspective. The inherent jurisdiction of the High Court under Section 482 CrPC should not be exercised to stifle a legitimate prosecution. The power under Section 482 CrPC is to be used sparingly only in rare cases. In a catena of cases, this Court reiterated that the powers of quashing criminal proceedings should be exercised very sparingly and quashing a complaint in criminal proceedings would depend upon the facts and circumstances of each case. (Vide State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , State of T.N. v. Thirukkural Perumal[(1995) 2 SCC 449 : 1995 SCC (Cri) 387] and CBI v. Ravi Shankar Srivastava [(2006) 7 SCC 188 : (2006) 3 SCC (Cri) 233] .)

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Learned counsel for the petitioners next submits that unconverted allegations as made in the complaint do not establish the offence alleged. In this respect, learned counsel for the petitioners next relies upon the judgment of the Hon’ble Supreme Court of India in the case of Vesa Holdings Private Limited & Another vs. State of Kerela & Others reported in (2015) 8 SCC 293 paragraph-12 and 13 of which reads as under:-

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12. From the decisions cited by the appellant, the settled proposition of law is 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 other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code, 1860 can be said to have been made out.

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13. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal

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Cr. M.P. No.69 of 2022

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proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show 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. In our view the complaint does not disclose any criminal offence at all. The criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the court. The superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of the court and the High Court committed an error in refusing to exercise the power under Section 482 of the Criminal Procedure Code to quash the proceedings. (Emphasis supplied)

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It is next submitted by the learned counsel for the petitioners that the continuation of this criminal proceeding will amount to abuse of process of this Court, hence, the same be quashed.

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Learned Addl.P.P. appearing for the State and learned counsel for the opposite party No.2 vehemently oppose the prayer to quash the order dated 16.02.2019 passed in Complaint Case No.806 of 2018. It is next submitted by the learned Addl.P.P. and learned counsel for the opposite party No.2 that this is a case where both the Civil Suit and Criminal Case will go together but it is fairly submitted by the learned counsel for the opposite party No.2 that there is no specific segregation as to how much amount was taken by which of the petitioners from the complainant or that at the time of taking money, the petitioners had any fraudulent and dishonest intention.

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Having heard the rival submissions made at the Bar and after carefully going through the materials in the record, it is pertinent to mention here that the distinction beating cheating and breach of contract is a thin one. The deciding factor which converts a breach of contract into an offence of cheating is the dishonest and fraudulent intention of the accused at the moment he induces the complainant to enter into the contract as has been held by the

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Cr. M.P. No.69 of 2022

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Hon’ble Supreme Court of India in the case of Hari Prasad Chamaria v. Bishun Kumar Surekha & others reported in (1973) 2 SCC 823 paragraphs- 4 of which read as under:-

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. We have heard Mr Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 of the Penal Code, 1860. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420 Penal Code, 1860. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs 35,000. There is also nothing to indicate that the respondents induced the appellant to pay them Rs 35,000 by deceiving him. It is further not the case of the appellant that a representation was made by the respondents to him at or before the time he paid the money to them and that at the time the representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the respondents for the offence of cheating.” (Emphasis supplied)

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After carefully going through the materials in the record, this Court finds that there is nothing in the complaint to show that the petitioners had dishonest or fraudulent intention at the time of the complainant parting with money nor is there any specific allegation against any of the particular petitioners as to which petitioner has taken how much money. The undisputed fact remains that though the co-accused persons have deposited a part of the money, in the trial court, the petitioners have not so far taken that money. There is no allegation to indicate that the petitioners induced the complainant to pay them any money. Under such circumstances, this Court is of the considered view that the continuation of order dated 16.02.2019 passed in Complaint Case No.806 of 2018 will amount to abuse of process of the Court, as even if the allegations

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Cr. M.P. No.69 of 2022

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made is considered to be true in its entirety, still the same do not constitute the offence punishable under section 420 of the Indian Penal Code.

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Accordingly, the order dated 16.02.2019 passed in Complaint Case No.806 of 2018 is quashed and set aside and in view of the same, interim order, if any stands vacated.

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In the result, this Cr.M.P. stands allowed.

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(Anil Kumar Choudhary, J . )

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High Court of Jharkhand, Ranchi Dated the 23^rd of March, 2023 AFR/ Animesh

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Kamta Nath Sahay Alias Kamta Sahay v. the State of Jharkhand

Case brief

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What did the court decide?

Kamta Nath Sahay Alias Kamta Sahay v. the State of Jharkhand

Case brief

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