Allowed

R N Singh Alias Ram Nath Singh And Anr. v. The State Of Jharkhand And Anr.

Jharkhand HC2 Sept 2024Cr.M.P./1385/2017

Case brief

AI extract

What is this about?

Quashing of criminal proceedings against petitioner No.2 under IPC 420/406 for alleged cheating and criminal breach of trust since allegations lacked proof of initial deception or dishonest misappropriation, reducing the matter to a civil dispute.

What did the court decide?

Criminal proceedings from Complaint Case No.336 of 2016 and the order taking cognizance dated 04.04.2017 were quashed and set aside against petitioner No.2. Interim relief granted vide order dated 10.

R N Singh Alias Ram Nath Singh And Anr. Vs The State… — Cheating and Forgery | Jharkhand HC (2024)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No.1385 of 2017

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R.N. Singh @ Ram Nath Singh, S/o Late Ambika Prasad Singh, and

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Anmol Singh, s/o Sri Ram Nath Singh,

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Both residents of Plot No.B1, City Center, Sector-4, P.O & P.S.Sector 4, District-Bokaro, Jharkhand … Petitioners

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Versus

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The State of Jharkhand, and

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M/s K.L. Bhasin & Company, through its partner Sri Dinesh Chaddha, Address: K.L. Bhasin & Co. Petrol Pump, Naya More, P.O & P.S.-Bokaro Steel City, District Bokaro, (Jharkhand)

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… Opposite Parties

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For the Petitioners : Mr. Mukesh Kumar, Advocate For the State : Mr. Shashi Kr. Verma, Addl.P.P. For the O.P. No.2 : Mr. Rajesh Kumar, 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 Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash and set aside the entire criminal proceeding arising out of Complaint Case No.336 of 2016 including the order taking cognizance dated 04.04.2017 passed by learned Judicial Magistrate-1^st Class, Bokaro whereby and where under the learned Judicial Magistrate-1^st Class, Bokaro has found prima facie case for the offences punishable under Sections 420/406 of the Indian Penal Code against the petitioner.

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Cr. M.P. No.1385 of 2017

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Learned counsel for the petitioners submits that the instant Cr.M.P. is not pressed on behalf of the petitioner No.1 namely R.N. Singh @ Ram Nath Singh as he has died.

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In view of this submission of the learned counsel for the petitioners, this Cr.M.P. is rejected as not pressed in respect of the petitioner No.1 namely R.N. Singh @ Ram Nath Singh.

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The allegation against the petitioner No.2 is that the petitioner No.2 being a partner of M/s R.N. Singh and Company was taking petrol and diesel on the basis of the credit note, but did not pay the outstanding dues. Earlier, a complaint case involving the offence punishable under Section 138 of N.I. Act was instituted by the complainant, consequent upon a cheque which was issued in discharge of the part of the balance amount was dishonoured. But, subsequently upon payment of the part of the outstanding amount, earlier complaint case was withdrawn upon the promise of the petitioner No.2 to pay the entire amount but even then the petitioner No.2 going back from his promise, is not paying the money.

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Learned counsel for the petitioners relies upon the judgment of Hon’ble Supreme Court of India in the case of Vir Prakash Sharma vs. Anil Kumar Agarwal & Another reported in (2007) 7 SCC 373 paragraph-15 of which reads as under:-

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“15. In law, only because he had issued cheques which were dishonoured, the same by itself would not mean that he had cheated the complainant. Assuming that such a statement had been made, the same, in our opinion, does not exhibit that there had been any intention on the part of the appellant herein to commit an offence under Section 417 of the Penal Code.”

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Cr. M.P. No.1385 of 2017

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and submits that therein it has been reiterated by the Hon’ble Supreme Court of India that only because a cheque was dishonored the same itself would not mean that the accused person has cheated the complainant.

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Learned counsel for the petitioner 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 Kerala & Others reported in (2015) 8 SCC 293 paragraph-12 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.” (Emphasis supplied)

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and submits that in the said case, the Hon’ble Supreme Court of India

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has reiterated the settled principle of law that even in a case of failure on the part of the accused to keep his promise, in the absence of culpable intention at the time of making initial promise, no offence under Section 420 of the Indian Penal Code, 1860 can be made out.

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Learned counsel for the petitioners next relies upon the judgment of the Hon’ble Supreme Court of India in the case of M N G Bharateesh Reddy vs.

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Ramesh Ranganathan & Another reported in 2022 SCC OnLine SC 1061 paragraph-24 of which reads as under:-

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“24. None of the ingredients of the offence of criminal breach of trust have been demonstrated on the allegations in the complaint as they stand. The first respondent alleges that the appellant caused breach of

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Cr. M.P. No.1385 of 2017

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trust by issuing grossly irregular bills, which adversely affected his professional fees. However, an alleged breach of the contractual terms does not ipso facto constitute the offence of the criminal breach of trust without there being a clear case of entrustment. No element of entrustment has been prima facie established based on the facts and circumstances of the present matter. Therefore, the ingredients of the offence of criminal breach of trust are ex facie not made out on the basis of the complaint as it stands.”

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and submits that therein the Hon’ble Supreme Court of India has reiterated the settled principle of law that the breach of the contractual terms does not ipso facto constitute the offence of the criminal breach of trust without there being a clear case of entrustment.

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Learned counsel for the petitioner next submits that there is no allegation against the petitioner No.2 of playing deception since the beginning of the transaction between the parties, hence, in the absence of the same, the offence punishable under Section 420 of the Indian Penal Code is not made out against the petitioner No.2; even if the entire allegations made against him are considered to be true.

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Learned counsel for the petitioner further submits that as there is no allegation of dishonest misappropriation of any property on the part of the petitioner No.2, hence, it is submitted that even if the entire allegations made against the petitioner No.2 are considered to be true in their entirety still the offence punishable under Section 406 of the Indian Penal Code is not made against him. It is lastly submitted that that the prayer, as prayed for in the instant Cr.M.P, be allowed.

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Learned Addl.P.P. appearing for the State and the learned counsel for the opposite party No.2 on the other hand vehemently oppose the prayer of the petitioner made in the instant Cr.M.P and submit that there is direct and

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Cr. M.P. No.1385 of 2017

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specific allegation against the petitioner No.2 of making a promise to pay the outstanding dues to the complainant and on the basis of the same as the complainant withdrew the earlier complaint case, so the allegations made out against the petitioner No.2 amounts to a case of cheating, having all its ingredients. Therefore, it is submitted that this Cr.M.P., being without any merit, be dismissed.

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Having heard the rival submissions made at the Bar and after carefully going through the materials available in the record, it is pertinent to mention here that it is a 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. If the intention to cheat has developed later on, the same cannot amount to cheating as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:-

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6. “Xxxx xxxx xxxx 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 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)

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Now, coming to the facts of the so far as the offence punishable under Section 420 of the Indian Penal Code is concerned, there is absolutely no allegation against the petitioner No.2 that the petitioner No.2 played deception since the beginning of the transaction between the parties rather it is the

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Cr. M.P. No.1385 of 2017

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admitted case of the complainant that part of the amount has been paid and even after institution of the case, the business transactions between the parties was going on but instead of supplying petrol and diesel on the credit note, the complainant is supplying the same on cash payment.

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Under such circumstances, this Court is of the considered view that even if the allegations against the petitioner No.2 are considered to be true in their entirety still the offence punishable under Section 420 of Indian Penal Code is not made out.

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So far as the offence punishable under Section 406 of the Indian Penal Code is concerned, it is a settled principle of law that to make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the accused person dishonestly disposed of the same in some way or dishonestly retained the same as has been reiterated by the Hon’ble Supreme Court of India in the case of Binod Kumar & Others vs. State of Bihar & Another reported in (2014) 10 SCC 663 paragraph-18 of which reads as under:-

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“18. In the present case, looking at the allegations in the complaint on the face of it, we find that no allegations are made attracting the ingredients of Section 405 IPC. Likewise, there are no allegations as to cheating or the dishonest intention of the appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant. Excepting the bald allegations that the appellants did not make payment to the second respondent and that the appellants utilised the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust.” (Emphasis supplied)

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Cr. M.P. No.1385 of 2017

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Now, coming to the facts of the case, there is absolutely no allegation against the petitioner No.2 of any dishonest misappropriation of the property. Under such circumstances, this Court is of the considered view that even if the allegations against the petitioner are considered to be true in their entirety still the offence punishable under Section 406 of Indian Penal Code is not made out.

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Because of the discussions made above as neither the offence punishable under Section 420 of the Indian Penal Code nor the offence punishable under Section 406 of the Indian Penal Code is made out, hence, this Court is of the considered view that the continuation of this criminal proceeding against the petitioner No.2 will amount to abuse of process of law and this is a fit case where the entire criminal proceeding arising out of Complaint Case No.336 of 2016 including the order taking cognizance dated 04.04.2017 passed by learned Judicial Magistrate-1^st Class, Bokaro, be quashed and set aside.

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Accordingly, the entire criminal proceeding arising out of Complaint Case No.336 of 2016 including the order taking cognizance dated 04.04.2017 passed by learned Judicial Magistrate-1^st Class, Bokaro, is quashed and set aside qua the petitioner No.2 namely Anmol Singh.

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

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In view of disposal of the instant Cr.M.P., the interim relief granted vide order dated 10.07.2017, stands vacated.

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(Anil Kumar Choudhary, J . )

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High Court of Jharkhand, Ranchi Dated the 02^nd of September, 2024 AFR/ Animesh

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Cr. M.P. No.1385 of 2017

R N Singh Alias Ram Nath Singh And Anr. v. The State Of Jharkhand And Anr.

Case brief

What is this about?

What did the court decide?

R N Singh Alias Ram Nath Singh And Anr. v. The State Of Jharkhand And Anr.

Case brief

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What did the court decide?

What the court decided

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