Delhi District Court
State vs : Shyam Lal Gulati on 25 August, 2014
IN THE COURT OF SH. SUDHANSHU KAUSHIK : ACMM-01 :
CENTRAL DISTRICT : TIS HAZARI COURTS : DELHI
State Vs : Shyam Lal Gulati
FIR No : 37/2009
U/s : 420 IPC
PS : Paharganj
Unique Identification No. 02401R0074962010
Date of Institution: 19.02.2010
Date of Judgment reserved on: 11.08.2014
Date of Judgment: 25.08.2014
Brief details of the case
A. Sl. No. of the case 1844/P
B. Offence complained of
or proved U/s 420 IPC
C. Date of Offence March 2008
D. Name of the complainant Sh. Darshan Singh
S/o Sh. Sant Singh
R/o 1530, Gali Sangatrashan,
Paharganj, New Delhi
E. Name of the accused Shyam Lal Gulati
S/o Sh. Kaka Ram
R/o H.No.635, Sangatrashan,
Paharganj, New Delhi
F. Plea of the accused Pleaded not guilty
G. Final order Acquitted
H. Date of Order 25.08.2014
Judgment
On the accusation of deceiving Sh. Darshan Singh (hereinafter
referred to as ' complainant' ) and dishonestly inducing him to advance a loan of
Rs.4 lacs by making a false promise of repaying the loan within a period of six
FIR No.37/2009 State Vs Shyam Lal Gulati Page 1 of 11
months and issuing three post-dated cheques as means of repayment of loan
from an account which was lying closed, accused Shyam Lal was sent up for
trial for committing offence punishable under Section 420 IPC.
Brief Facts as disclosed in the charge-sheet
2. The case of prosecution is that somewhere in the month of March 2008, complainant (PW-1) advanced a friendly loan of Rs. 4 lacs to the accused on the assurance that the loan amount would be repaid within six months. This loan amount was handed over to the accused in the presence of Baljeet Singh (PW-4) and Ranjeet Singh (PW-5) and at that time, accused executed a promissory note undertaking to repay the loan amount within the stipulated period. Subsequently, in the month of October 2008, towards repayment of the loan amount, accused handed over three post-dated cheques to the complainant but these cheques were dishonored on presentation and were returned back by the banker with remarks that the account has been closed. Complainant initially lodged a complaint with the police but no action was taken. Feeling aggrieved, he moved an application under Section 156(3) Cr.P.C and on this application, directions for registration of FIR were issued by the concerned court. In the said background, present FIR bearing Number 37/2009 under Section 420 IPC was registered at Police Station Paharganj and investigation was assigned to SI Har Prasad (PW-7). Accused secured anticipatory bail and joined investigation. Complainant produced the photocopies of the promissory note and dishonored cheques which were seized and statement of witnesses were recorded. On completion of investigation, charge-sheet was put to the court. FIR No.37/2009 State Vs Shyam Lal Gulati Page 2 of 11
3. Copies of the charge-sheet were supplied to the accused and charge under Section 420 IPC was framed against him to which he pleaded not guilty and claimed trial.
Witnesses Examined
4. In order bring home the charge against the accused, seven prosecution witnesses were examined.
PW-1 Sh. Darshan Singh (Complainant) affirmed the the contents of his complaint.
PW-2 HC Suresh Kumar (Duty Officer) mentioned about registration of FIR which is Ex.PW-2/A PW-3 Ct. Amresh (Witness of arrest) stated that accused was formally arrested from his house.
PW-4 Baljeet Singh (First attesting witness of Promissory Note) mentioned that the loan was advanced in his presence and identified his signatures on the Promissory Note.
PW-5 Ranjeet Singh (Second attesting witness of Promissory Note) deposed on the line of Baljeet Singh.
PW-6 Avdhesh Kumar (Officer from Oriental Bank of Commerce) produced certified copy of statement of account of accused.
PW-7 SI Har Prasad (Investigating Officer) justified the investigation carried out by him.
5. Statement of accused was recorded under Section 313 Cr.P.C wherein he denied all the incriminating evidence. He gave a different version of FIR No.37/2009 State Vs Shyam Lal Gulati Page 3 of 11 the transaction. He stated that complainant used to run a domestic chit fund. He mentioned that complainant advanced him a sum of Rs.1 lac and took three blank cheques as security and obtained his signatures on a blank promissory note. He stated that, although, he has mentioned the amount of Rs. 50,000/- on each cheque but the date and name were not filed by him. He stated that, although, he returned the entire loan amount by way of then installments but the promissory note and blank cheques were not returned by the complainant. He stated that these documents have been misused by the complainant who has also instituted a complaint against him under Section 138 of N.I.Act. He mentioned that he has already filed a suit for cancellation of promissory note and cheques, which is pending before the civil court.
6. Two defence witnesses were examined.
DW-1 Sh. Sanjay Kanojia (Ahlmad from the court of Ms. Shivani Chauhan, Ld. Civil Judge, Tis Hazari Courts, Delhi) produced the original record of suit No.202/09 wherein complainant has sought directions that the cheques and the promissory note may be declared null & void.
DW-2 Sh. Umed Singh (Clerk from Oriental Bank of Commerce) produced a letter dated 11.07.2007 (Ex.DW-2/B) and statement of account (Ex.DW-2/C).
Arguments
7. I have heard Ld. APP for State as well as Ld. Defence Counsel and carefully gone through the entire material available on record.
8. Ld. Defence Counsel has argued that prosecution has failed to FIR No.37/2009 State Vs Shyam Lal Gulati Page 4 of 11 establish its case. He has contended that even if the prosecution' s case is taken at its best, still it can not be concluded that accused committed the offence of cheating. Counsel has argued that complainant has already instituted complaints under Section 138 N.I.Act in respect of dishonored cheques and in view of this fact, the accused can not be convicted under Section 420 IPC. He has further argued that there is no evidence to infer that at the time of taking the alleged loan, accused was having the fraudulent or dishonest intention to cheat the complainant and in the absence of mens-rea, conviction under Section 420 IPC is not possible.
9. On the other hand, Ld. APP for State has argued that charge under Section 420 IPC stands proved beyond reasonable doubt. He argued that the fact that accused issued cheques of repayment from his account, which was already lying closed, demonstrate his intention to cheat the complainant. He has contended that accused can not escape conviction and take shield behind the argument that complaint under Section 138 N.I.Act has already been instituted on the basis of dishonored cheques.
Brief reasons for decision
10. I have perused the record in the light of respective arguments.
11. The charges against the accused are that he obtained a loan from the complainant without any intention to repay it and subsequently issued three post-dated cheques as repayment of the loan amount knowing fully well that the account on which the cheques have been drawn was lying closed. Admittedly, on the basis of dishonored cheques, criminal complaint under Section 138 FIR No.37/2009 State Vs Shyam Lal Gulati Page 5 of 11 N.I.Act has already been filed by the complainant. It has been held in various judicial pronouncements that in all cases of dishonor of cheques, offence of cheating under Section 415 to 420 IPC is not always attracted. It depends upon the facts and circumstances of each case and only in those cases where the complainant is able to prove that there is intention of drawer to cheat and element of mens-rea is available, then only the offence of cheating is made out. Reference in this regard can be made to " Hari Prasad Chamari Vs Bishun Kumar Surekha" AIR 1974 SCC 301 . Let us peruse the record to see whether charge under Section 420 IPC has been established.
12. Section 420 IPC provides punishment for cheating and states that whoever cheats and thereby dishonestly induces the person deceive to deliver any property to any person, or to make, alter or destroy the whole or any part of valuable security or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with the imprisonment provided under the said Section. The term cheating has been defined under Section 415 IPC. It 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 was not so deceived, and which act of omission causes or his likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat. Thus, to conclude that a person has cheated a person, the first and foremost ingredient is that there FIR No.37/2009 State Vs Shyam Lal Gulati Page 6 of 11 should be a dishonest inducement to deceive a person to deliver any property and the person so deceived must act on the said dishonest inducement.
13. For the purpose of holding a person guilty under Section 420, the evidence adduced must establish, beyond reasonable doubt, mens-rea on his part. A guilty intention is an essential ingredient of the offence of cheating and mens-rea on part of the accused must be established before he can be convicted of an offence of cheating. Unless the evidence shows that accused had dishonest or fraudulent intention at the time of making dishonest inducement, he can not be convicted for the offence of cheating. Moreover, the record must show that the intention to deceive was in existence at the time when the inducement was offered. Prosecution is duty bound to prove every ingredient of the offence including the burden of proving the mental state of the accused where intention or knowledge forms one of the ingredients of the offence and that the act of accused was intentional. This mental state can be gathered and presumed from the fact and circumstances of each case.
14. Adverting to the facts of the present case, it is the case of complainant that accused cheated him by making a false promise of returning the loan amount and issued post-dated cheques from his bank account which was lying closed. In the facts of the present case, the evidence must demonstrate that accused had dishonest or fraudulent intention at the time when the complainant parted with the money. In order to constitute the offence of cheating, the intention to deceive must be shown to be in existence at the time when the inducement was offered. Reference in this regard can be made to , FIR No.37/2009 State Vs Shyam Lal Gulati Page 7 of 11 " Hari Prasad Chamaria' s case (supra) where it was held that, for establishing the offence of cheating, complainant is required to show that accused had dishonest or fraudulent intention at the time of making promise or representation. From his mere failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made, can not be presumed.
15. It is the complainant' s own case that accused obtained a loan of Rs. 4 lacs from him and at that time, he executed a promissory note/receipt which is Ex.PW-1/B. I have perused the contents of the alleged promissory note. It has been mentioned therein that accused undertook to repay the loan amount within a period of six months alongwith an interest @ 2.5% per month. Complainant (PW-1) has relied upon the said document to establish that the loan was disbursed and accused undertook to repay it within six months. Sh. Baljeet Singh (PW-4) and Ranjeet Singh (PW-5), friends of complainant, who were attesting witnesses, have supported the complainant' s version that accused executed the promissory note at the time of receiving the loan amount. Complainant further deposed that after about six months, he demanded repayment of loan from the accused and as means of repayment, he issued three post-dated cheques to him. He has admitted in his cross examination that in the month of October 2008, he approached accused for repayment of loan and he handed over three post-dated cheques which are Ex.PW-1/B, Ex.PW-1/C & Ex.PW-1/D dated 17.10.2008, 17.11.2008 & 17.12.2008 respectively. These three post-dated cheques were issued to him as repayment of loan amount. The FIR No.37/2009 State Vs Shyam Lal Gulati Page 8 of 11 actual loan amount as per the version of complainant was Rs.4 lacs while each cheque was of Rs.50,000/- (Rupees Fifty Thousands only). Complainant has remained silent about the repayment of the remaining loan amount. I find myself in complete agreement with the arguments of defence that even if the complainant' s version is taken to be absolutely correct, still, there is no evidence on the basis of which it could be inferred that accused was having a dishonest intention to cheat the complainant at the time of obtaining loan. The fact that the cheques were dishonored can, at most, be taken as evidence that accused failed to keep his promise and make repayment as per the agreed schedule, but no criminal intention to cheat can be inferred merely because of this reason.
16. Ld. Defence Counsel has pointed out that the statement of bank account demonstrates that the cheque bearing subsequent numbers of the same series were issued and cleared in the year 2006. He has pointed out towards the entires dated 23.08.2006, 25.08.2006, 28.08.2006, 18.09.2006, 20.09.2006 and 23.09.2006 in the statement of bank account (Ex.DW-2/C) and argued that these entries show that the cheques carrying the subsequent numbers were, in fact, honoured by the banker of accused. He has further argued that the bank account of accused was closed by his banker after he failed to supply the requisite details which were demanded from him. He stated that the account was closed on 13.08.2007 after the accused communicated to his banker that he is no longer running the export business for which the account was opened and this fact is borne out by the document Ex.DW-1/B. I find force in the FIR No.37/2009 State Vs Shyam Lal Gulati Page 9 of 11 submissions made by the defence counsel. The cheques in question i.e. Ex.PW-1/C, Ex.PW-1/D & PW-1/E are numbered as 443252, 443253 & 443251 while the cheques bearing subsequent numbers of the same series stand cleared on the dates mentioned above. This fact does demonstrates that the cheques were post-dated cheques. It further fortifies my conclusion that the act of the accused can at best be termed as his failure to keep promise of repaying the loan amount as per the stipulated terms. This might create a civil liability but this fact, in itself, would not be sufficient to fasten criminal liability on the accused. Record shows that, although, complainant (PW-1) narrated the entire episode but did not even whisper a word that accused was having any criminal intention to cheat him at the time of taking loan. There is nothing on record to prove the requisite criminal intention to cheat which perhaps is the gist of the offence.
17. In view of the discussions made in the aforesaid paras, I am of the considered opinion that prosecution has miserably failed to establish the charge of cheating against the accused. The cheques which were handed over by the accused to the complainant were post-dated cheques. They were presented before the banker at a much later date. When the cheques were issued, the bank account of the accused was very much operative. Even if we assume that the account was closed subsequently, still, the same would not mean that accused had an intention to cheat when the post-dated cheques were issued. Record does not demonstrate that accused made any false representation to the complainant or that the complainant acted upon such representation and advanced loan to FIR No.37/2009 State Vs Shyam Lal Gulati Page 10 of 11 him. The dispute between the parties herein is essentially a civil dispute. It can not be held that accused cheated the complainant merely because he issued cheques which were not honoured, the same, by itself, would not mean that he has cheated the complainant. The transaction, at best, can be described as breach of contract which can not be equated with the offence of cheating. Reliance in this regard has been placed on " Veer Prakash Sharma Vs Anil Kumar Aggarwal & Ors." 2007 CLJ 3735, " Mehiboobsab Abbasabi Nadaf Vs State of Karnataka" 2007 CLJ 3737 and " Subodh S Salaskar Vs Jai Prakash M Shah & Anr." 2008 (3) JCC (NI) 330 . The result is obvious. Accused Shyam Lal Gulati stands acquitted of the charges under Section 420 IPC.
File be consigned to record room after necessary compliance.
Announced in open Court (SUDHANSHU KAUSHIK)
on 25.08.2014 ACMM-01, Central District,
Tis Hazari Courts, Delhi
It is certified that this judgment contains Eleven (11) pages and each page bears my signatures.
(SUDHANSHU KAUSHIK) ACMM-01, Central District, Tis Hazari Courts, Delhi FIR No.37/2009 State Vs Shyam Lal Gulati Page 11 of 11