Partly allowed

Mahendra Singh v. State of Rajasthan and Anr.

Rajasthan HC5 Aug 2015CRLMP/2490/2014

Case brief

AI extract

What is this about?

The court quashed the FIR regarding criminal breach of trust but dismissed the petition challenging offences of cheating, ruling that prima facie evidence of fraudulent intent justified continued criminal investigation despite the contract dispute.

What did the court decide?

FIR quashed to the extent of Section 406 IPC; petition dismissed regarding offences under Section 420 IPC.

Mahendra Singh Vs State of Rajasthan and… — Contract and Commercial Disputes | Rajasthan HC (2015)

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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR

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O R D E R

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S.B.Criminal Misc. Petition No.2490/2014 (Mahendra Singh Vs. State of Rajasthan & Anr.)

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Date of Order ::::: 05.08.2015

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HON'BLE MR. JUSTICE PRASHANT KUMAR AGARWAL

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Mr.Sandeep Garsa, for the petitioner. Mr.Prakash Thakuria,Public Prosecutor for State. Mr.Yadvendra Yadav, for the complainant-respondent.

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The accused-petitioner has filed this Criminal Misc.Petition under Section 482 Cr.P.C.with a prayer to quash and set aside the FIR No.212/2014 registered at Police Station Kotwali, Jhunjhunu for the offences under Sections 420 and 406 IPC.

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Brief relevant facts for the disposal of this petition are that the aforesaid FIR came to be reigstered at the instance of respondentcomplainant against the petitioner on 08.05.2014 on the premise that the petitioner entered into an agreement with the respondent to purchase a vehicle and against the sale price of the vehicle the petitioner paid Rs.1,22,600/- and for remaining amount of sale price he gave cheque dated 10.04.2014 for Rs.5,90,000/-, on which the vehicle was handed over to petitioner but the aforesaid cheque on being presented for encashment dishonoured by the reason that sufficient funds were not available in the bank account for which the cheque was issued. It is further case of the respondent that the petitioner did not make payment of the remaining amount despite the fact that demands were made several times.

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It was submitted by the learned counsel for the petitioner that even if for the sake of arguments allegations made in the FIR are

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accepted on their fave value and are taken to be true and correct in its entirety, even then at the most it is a case of breach of contract on the part of the petitioner, but only by that reason criminal liability of any kind cannot be fastened upon him. According to learned counsel for the petitioner for an offence to be made out under Section 420 IPC, well settled legal position is that fraudulent and dishonest intention to deceive some person on the part of accused is to be disclosed at the time when promise or representation was made and offence under this provision cannot be made out merely because the accused failed to keep his promise or representation lateron. According to learned counsel for the petitioner it is a pure and simple case of breach of contract of sale which does not constitute offence of criminal breach of trust or cheating. According to him for an offence to be made out under Section 406 IPC, it is essential to show that some property was entrusted to the accused and he converted it for his own use, but in the present case no such allegation has been made by the complainant himself. It was contended that merely because the petitioner obtained a vehicle from the respondent in pursuance of agreement to sell after paying a part of sale consideration and he lateron failed to make payment of the remaining amount, it cannot be said that he has deceived the respondent or committed offence of criminal breach of trust.

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On the other hand, learned Public Prosecutor assisted by the learned counsel for the complainant, submitted that the present case is not a pure and simple case of breach of contract giving rise to civil liability only on the part of the petitioner, but the overall conduct of the petitioner clearly shows that from the very beginning he was having fraudulent and dishonest intention to deceive the complainant. It was further submitted

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that initially it was represented by the petitioner that the remaining amount of Rs.5,90,000/- would be paid by a Finance Company and if by any reason the Finance Company does not pay the said amount, the petitioner himself would pay the entire remaining amount and representation/promise the complainant agreed to sale vehicle in question to the petitioner and also handed over possession of it to him and the petitioner gave a cheque towards payment of the remaining amount with an assurance that on being presented for encashment, it would be honoured, but when the complainant presented the cheque for encashment, it was dishonoured by the reason that even at the date of issuance of cheque sufficient funds were not available in the bank account of the petitioner and this conduct on the part of the petitioner is clear indication of the fact that from the very beginning he was having fraudulent and dishonest intention not to make payment of the remaining amount. It was also submitted that to infer whether the accused was having fraudulent or dishonest intention at the time of initial promise or representation, his overall conduct is to be taken into consideration. It was also submitted that it is well settled position that at the time of considering the question of quashing of FIR/complaint only prima facie has to be seen whether allegations made in it disclosed essential ingredients of an offence or not and at this stage of the proceedings analysis of the allegations is not required to be made. It was also submitted that it is well settled legal position that for the same act of an accused civil and criminal proceedings can run simultaneously and, therefore, even if the complainant had some civil remedy available to him, it cannot be said that further investigation is barred on the basis of present FIR.

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I have considered the submissions made on behalf of the

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respective parties and the material made avalable on record as well as the relevant legal provisions and the case law.

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In the facts and circumstances of the case and the material made available on record and in the light of the well settled legal position, it is to be considered whether the offences under Sections 420 and 406 IPC or any of them is made out or disclosed against the petitioner or not.

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Offence under Section 406 IPC

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For an offence to be made out under Section 406 IPC, first of all it is to be seen whether there was any criminal breach of trust as defined under Section 405 IPC on the part of the accused. As per Section 405 IPC, whoever, being in any manner entrusted with property, or with any dominion over property dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits criminal breach of trust. Thus, the first and paramount ingredient for an offence of criminal breach of trust to be made out it is required to be shown that some property was entrusted to the accused or he having dominion over such property dishonestly misappropriated or converted for his own use that property. In the present case, it cannot be said that the vehicle in question handed over by the complainant to the petitioner was in enstrument or the petitioner had dominion over it in any manner on behalf of the complainant. It is the case of complainant himself that the parties entered into agreement to sell and purchase the aforesaid vehicle and against the sale price part payment

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was made by the petitioner to the complainant and thereupon possession of the vehicle was given by the complainant to the petitioner. Thus, when the essential ingredient to make an act of an accused to be criminal breach of trust within the meaning of Section 405 IPC is absent, the offence under Section 406 IPC cannot be said to be made out even prima facie against the petitioner and, therefore, the FIR to that extent is liable to be quashed.

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Offence under Section 420 IPC

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Section 420 IPC provides that, whoever, cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and also liable to fine. It is thus, clear that for an offence to be made out under Section 420 IPC, it is to be shown that the accused cheats a person. The word “cheating” has been defined under Section 415 IPC, which provides that, whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. It is now well settled legal position that in order to constitute an offence of cheating the intention to deceive should be in existence at the time when the

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inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act of committing cheating, but at the same time it is also well settled legal position that subsequent conduct of the accused is also a relevant factor to infer whether he had fraudulent or dishonest intention at the inception i.e. when the offence was committed. In the present case, the overall conduct of the petitioner as pointed out by the learned counsel for the complainant and which has already been referred above, in my opinion is sufficient to infer prima facie that the petitioner from the very beginning was having a fraudulent or dishonest intention to deceive the complainant and to obtain from him the vehicle on the pretext that the remaining amount of sale consideration would be paid lateron without having any intention to pay it. Although, cheating on the part of the petitioner cannot be inferred merely because the cheque issued by him stood dishonoured but his assurance that the remaining part of the sale price would be paid either by the Finance Company or by him he after obtaining possession of the vehicle issued cheque for the remaining amount despite the fact that on the date of issuance of cheque, there was no sufficient funds in his bank account, prima facie indication of criminality on the part of the petitioner. From the averments made in the FIR, it cannot be said that essential ingredients to constitute the offence of cheating as punishable under Section 420 IPC are not disclosed even prima facie.

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So far as the dispute between the parties is essentially a dispute of civil nature is concerned, it is well settled legal position that if prima facie there are ingredients for an offence as disclosed from the

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complaint/FIR, the same cannot be quashed on the ground that civil proceedings can also be filed against the accused on the basis of same facts. It is now well settled legal position that both the proceedings can run simultaneously, if essential ingredients of the offence are also made out.

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Consequently, the criminal misc.petition is partly allowed and FIR No.212/2014 registered at Police Station Kotwali, Jhunjhunu to the extent of offence under Section 406 IPC is quashed, but to the extent of offence under Sections 420, the petition is dismissed. The stay application also stands dismissed.

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(PRASHANT KUMAR AGARWAL), J teekam S.No.24

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“All corrections made in the judgment/ order have been incorporated in the judgment/ order being emailed.”

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Teekam Khanchandani Private Secretary

Mahendra Singh v. State of Rajasthan and Anr.

Case brief

What is this about?

What did the court decide?

Mahendra Singh v. State of Rajasthan and Anr.

Case brief

What is this about?

What did the court decide?

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