Supreme Court - Daily Orders
Samir Sahay @ Sameer Sahay vs The State Of Uttar Pradesh Home ... on 25 August, 2017
Author: Ashok Bhushan
Bench: A.K. Sikri, Ashok Bhushan
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1541 OF 2017
(arising out of SLP(Crl.)NO.2320 of 2017)
SAMIR SAHAY @ SAMEER Sahay ... APPELLANT
VERSUS
STATE OF U.P. AND ANOTHER ... RESPONDENTS
O R D E R
ASHOK BHUSHAN, J.
Leave granted
2. This appeal has been filed against the
judgment of Allahabad High Court dated 21.10.2016
in Criminal Revision No. 724 of 2007 dismissing the
criminal revision filed by the appellant. The
criminal revision was filed by the appellant
challenging the order dated 28.02.2007 passed by
Chief Judicial Magistrate, Fatehpur by which order
Chief Judicial Magistrate rejected the application
of the appellant for discharge in Criminal Case No.
545 of 2002 under Section 420 IPC.
Signature Not Verified
Digitally signed by
ASHWANI KUMAR
Date: 2017.08.31
18:03:29 IST
3. The brief facts giving rise to this appeal
Reason:
are:
The Company, namely, M/s. Aneja Consultancy
(hereinafter referred to as 'the Company') was
founded in the year 1984 by one I.J. Aneja as
Chairman. Father of the appellant, Major P.C. Sahay
(Retd.) joined the Company as Branch Manager at
District Fatehpur. Several persons including
appellant as well as respondent No.2 deposited
different amounts in the Company. Respondent No.2
and his wife deposited total amount of Rs.86,000/
in the Company in June/July, 1987. The
owner/Proprietor of the Company on 20.06.1996 made
a public declaration that the owner would bear the
full liability and responsibility of all deposits
made by various investors across the country and
employees and staff of the Company have no
personal liabilities to repay to the investors. The
Company faced a financial trouble, cash/liquidity
crunch and was unable to make repayment of the
money of the investors. Respondent No.2 lodged
First Information Report on 30.05.1998 against the
appellant and his father Major(Retd.) P.C. Sahay
under Section 420 IPC. A Case Crime No.386 of 1998
was registered against the appellant under Section
420 IPC. A criminal writ petition was filed
challenging the FIR dated 30.05.1998 by the
appellant as well as his father Major P.C.
Sahay(Retd.). The High Court vide its judgment
dated 21.10.2016 stayed the arrest of the appellant
till submission of chargesheet whereas prayer of
the father of the appellant to stay of arrest was
rejected. Respondent No.2 and his wife filed a
complaint before District Consumer Forum, Fatehpur
against the Chairman of the Company/Proprietor and
Managing Director of the Company praying for
realisation of the amount deposited in June/July,
1997 along with interest and Rs.2000/ as
expenditure of the litigation. The complaint was
filed on 09.11.1998.
4. The Police carried out investigation in
Criminal Case NO.386 of 1998 recorded the statement
of respondent No.2 and his wife and a chargesheet
No.358 of 2001 dated 14.10.2001 was submitted by
the Police under Section 420 IPC. The cognizance
was taken on 15.02.2002. The appellant filed an
application for discharge alleging that neither
sufficient allegations are made nor evidence to
prosecute the appellant under Section 420 IPC was
produced. Chief Judicial Magistrate rejected the
application for discharge vide his order dated
28.02.2007 against which Criminal Revision was
filed by the appellant in the High Court. The
Criminal Revision has been dismissed on 21.10.2016
against which order this appeal has been filed.
5. We have heard Shri Pradeep Kant, learned
senior counsel appearing for the appellant and
learned counsel for the State of U.P.
6. Although, notices were published in the
newspaper, Amar Ujala, Kanpur on 12.08.2017 as well
as in Amar Ujala, Fatehpur on 13.08.2017 but no one
has appeared for respondent No.2.
7. Learned senior counsel for the appellant in
support of the appeal submits that in the First
Information Report lodged by respondent No.2
against the appellant for the offence under Section
420 IPC, the ingredients of Section 420 IPC are not
present in the allegation and the courts below
committed error in rejecting the application for
discharge filed by the appellant.
8. Learned senior counsel for the State submits
that both in the First Information Report as well
as in the statement made by complainant under
Section 161 Cr.P.C., it was alleged that false
assurance was given to the complainant to deposit
money. He submits that it is not necessary that
accused should be an employee of the Aneja
Consultancy. There the loss was caused to the
complainant due to the false assurance given by
Major P.C. Sahay (Retd.) and the appellant who was
his son.
9. We have considered the submissions made by the
learned counsel for the parties and perused the
records.
10. The copy of First Information Report lodged by
respondent No.2 against the appellant and his
father is at AnnexureP6 to the paper book. It will
be useful to reproduce the entire First
Information Report lodged by respondent No.2 which
is as follows(as translated into English):
“To, the S.H.O. Kotwali Fatehpur
Janpat Fatehpur Sir, It is requested
that the applicant colonel
R.K.Singh(Retired) is a R/o Mohalla
Nasirpur Lal Bahadur Shashtri Marg,
City, Fatehpur P.S. Kotwali Fatehpur
Janpat Fatehpur. In the City Fatehpur
in Mohalla Civil Lines of the
applicant an office was opened at
I.T.I. Road in the name of Aneja Group
Consultancy. Their People came to the
applicant and make him understand and
assured him if I or any person will
deposit money with their company,
their company will return the double
amount after three years but the
applicant did not assure on them. (3)
But In the month of June 1997 retired
Major P.C.Sahay R/o Lavrol House 145
Civil Lines Fatehpur who was known to
the applicant being an army personnel
and a resident of the same locality
contacted to the applicant and
assured him that he is the Regional
Manager of the said company and
whatever amount the applicant will
deposit he will give the receipt of
the same with his signature it was
also assured that the money of the
applicant will not be lost this and
all responsibility will be on him.
Along with him his son Samir Sahay
Advocate who was already acquainted
with the applicant also accompanied
his father. Major PC Sahay gave the
above said assurance, and the
applicant and his wife Smt. Uma Devi
deposited Rupees one Lakh with Major
P.C.Sahay in this regard and he gave
the receipt of the same to the
applicant of which the applicant is
enclosing the photocopy. Like this
Major P.C.Sahay(retired) has got
deposited total amount of Rs.86,000/
from me and my wife (4) But after some
days it came to know that the said
company has ran away along with the
lakhs of rupees of the depositors
after closing its office. I personally
went and found the office closed. (5)
I met with Major P.C.Sahay(retired)
and his son Samir Sahay they denied
their responsibility and said that due
to loss the company has been closed.
(6) In this way the owner of company
Aneja Group Major P.C.Sahay(retired)
Regional Manager and his son Samir
Sahay have committed forgery by giving
false assurance to the depositors and
caused loss to them on their deposited
amount earned profit illegally and
have committed the offence of
conspiracy and forgery. (7) It is
therefore prayed that after
registering the F.I.R. appropriate
legal action may be taken against the
above said persons. It has also come
to knowledge that goods worth about
one lakh are kept in the office of the
company which has been taken into his
possession by the owner of the
shop(office). In this regard a list of
the property and goods given by flight
lieutenant Nagendra Vikram Senior
Branch Manager Aneja Group is
enclosed. Which may be attached so
that some money of the depositors be
returned (8) Details of the receipts
and deposited amount.“
11. After lodging the First Information Report,
respondent No.2 and his wife had also filed
Petition No.318 of 1998 before the District
Consumer Forum, Fatehpur against Inderjeet Aneja,
Proprietor of Aneja Consultancy, President and
Managing Director of Aneja Financial Services
Limited and Aneja Group of Companies. In the
complaint filed before the District Consumer Forum
neither the appellant nor his father was arrayed
and no allegation was made against the appellant
and his father in the complaint. It is also
relevant to note that the said complaint filed by
respondent No.2 and his wife ultimately was allowed
by the District Consumer Forum on 27.12.2006. The
District Consumer Forum directed the amount as
claimed to be paid within 15 days after receiving
the copy of the order.
12. It is also relevant to note that the appellant
had also filed a complaint being No.111 of 1999
along with his wife, son, father and other family
members alleging that applicants had deposited an
amount of Rs.3,49,415/ in the Company which has
not been returned back. The District Consumer Forum
allowed the complaint filed by the appellant vide
order dated 16.08.2001 directing payment with
interest at the rate of 9% per annum.
13. In the statement made before the Police under
Section 161 Cr.P.C. both respondent No.2 and his
wife have repeated the same allegations which were
made in the First Information Report. In the
statement which has been brought on record under
Section 161 Cr.P.C., respondent No.2 and his wife
had alleged that Major P.C. Sahay (Retd.) who was
known to respondent No.2 contacted respondent No.2
and assured him that if any amount was deposited
with the Company, he would take the entire
responsibility. It was further stated that the
appellant accompanied his father Major P.C. Sahay
(Retd.) who was known to respondent No.2.
14. The application was filed by the appellant
seeking discharge on the ground that there are no
evidence to frame charge under Section 420 IPC.
Learned Chief Judicial Magistrate while rejecting
the application filed by the appellant for
discharge has observed that on the assurance of
both Major P.C. Sahay (Retd.) and the appellant,
the complainant and his wife deposited Rs.86,000/.
Learned Chief Judicial Magistrate has given
following reasons for rejecting the application:
"It has been clearly mentioned in the
F.I.R. that after the assurance of
deceased P.C. Sahay and his son Samir
Sahay the money was invested in the
Company. As well as it has also been
mentioned that accused Samir Sahay was
receiving commission from the Company
after perusing all the evidence in the
file as per law there is proof to
frame allegation against accused Samir
Sahay.”
15. The order passed by the Chief Judicial
Magistrate was challenged. The High Court by brief
order has dismissed the revision observing that
counsel for the revisionist could not point out any
manifest error or otherwise illegality so as to
warrant interference.
16. Before we proceed further to examine the
contentions of the learned counsel for the parties,
it is necessary to notice the ingredients for
establishing a charge under Section 420 IPC.
Section 415 IPC defines cheating which is to the
following effect:
"Section 415. Cheating. 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”.”
17. Section 420 IPC is with regard to the
cheating and dishonestly inducing delivery of
property which is to the following effect:
"Section 420. Cheating and
dishonestly inducing delivery of
property. 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 shall also be liable to
fine.”
18. According to Section 415 IPC, the inducement
must be fraudulent and dishonest which depends upon
the intention of the accused at the time of
inducement. This Court had occasion to consider
Sections 415 and 420 IPC in Hridaya Ranjan Prasad
Verma and others vs. State of Bihar and another,
2000 (4) SCC 168. This Court after noticing the
provisions of Section 415 and 420 IPC stated
following in paragraphs 14 and 15:
“14. On a reading of the section it is
manifest that in the definition there are
set forth two separate classes of acts
which the person deceived may be induced
to do. In the first place he may be
induced fraudulently or dishonestly to
deliver any property to any person. The
second class of acts set forth in the
section is the doing or omitting to do
anything which the person deceived would
not do or omit to do if he were not so
deceived. In the first class of cases the
inducing must be fraudulent or dishonest.
In the second class of acts, the inducing
must be intentional but not fraudulent or
dishonest.
15. In determining the question it has
to be kept in mind that the distinction
between mere breach of contract and the
offence of cheating is a fine one. It
depends upon the intention of the accused
at the time of inducement which may be
judged by his subsequent conduct but for
this subsequent conduct is not the sole
test. Mere breach of contract cannot give
rise to criminal prosecution for cheating
unless fraudulent or dishonest intention
is shown right at the beginning of the
transaction, that is the time when the
offence is said to have been committed.
Therefore it is the intention which is the
gist of the offence. To hold a person
guilty of cheating it is necessary to show
that he had fraudulent or dishonest
intention at the time of making the
promise. From his mere failure to keep up
promise subsequently such a culpable
intention right at the beginning, that is,
when he made the promise cannot be
presumed.”
19. Again in Dalip Kaur and others vs. Jagnar
Singh and another, 2009 (14) SCC 696, this Court
noticed the ingredients of Section 420 IPC. In
paragraphs 9 to 11 following was stated:
“9. The ingredients of Section 420
of the Penal Code are:
“(i) Deception of any persons;
(ii) Fraudulently or dishonestly
inducing any person to deliver any
property; or
(iii) To consent that any person
shall retain any property and finally
intentionally inducing that person to
do or omit to do anything which he
would not do or omit.”
10. The High Court, therefore,
should have posed a question as to
whether any act of inducement on the
part of the appellant has been raised
by the second respondent and whether
the appellant had an intention to
cheat him from the very inception. If
the dispute between the parties was
essentially a civil dispute resulting
from a breach of contract on the part
of the appellants by nonrefunding the
amount of advance the same would not
constitute an offence of cheating.
Similar is the legal position in
respect of an offence of criminal
breach of trust having regard to its
definition contained in Section 405 of
the Penal Code. (See Ajay Mitra v.
State of M.P., 2003 (3) SCC 11)
11. There cannot furthermore be any
doubt that the High Court would
exercise its inherent jurisdiction
only when one or the other
propositions of law, as laid down in
R. Kalyani v. Janak C. Mehta, 2009 (1)
SCC 516 is attracted, which are as
under: (SCC p. 523, para 15)
“(1) The High Court ordinarily would
not exercise its inherent jurisdiction
to quash a criminal proceeding and, in
particular, a first information report
unless the allegations contained
therein, even if given face value and
taken to be correct in their entirety,
disclosed no cognizable offence.
(2) For the said purpose the Court,
save and except in very exceptional
circumstances, would not look to any
document relied upon by the defence.
(3) Such a power should be exercised
very sparingly. If the allegations
made in the FIR disclose commission of
an offence, the court shall not go
beyond the same and pass an order in
favour of the accused to hold absence
of any mens rea or actus reus.
(4) If the allegation discloses a
civil dispute, the same by itself may
not be a ground to hold that the
criminal proceedings should not be
allowed to continue.””
20. Applying the ratio laid down by this Court as
noted above, it is clear that ingredients of
Section 420 IPC are not made out in the present
case, either from the First Information Report or
from any other material. From the First Information
Report as extracted above only allegation made
against the appellant was that he accompanied his
father Major P.C. Sahay (Retd.) when he assured
that the money of the applicants will not be lost
and it shall be the responsibility of his
father(late P.C. Sahay). Following allegations made
in the First Information Report need to be
specially noticed:
“Along with him his son Samir Sahay
Advocate who was already acquainted
with the applicant also accompanied
his father. Major PC Sahay gave the
above said assurance, and the
applicant and his wife Smt. Uma Devi
deposited Rupees one Lakh with Major
P.C.Sahay in this regard and he gave
the receipt of the same to the
applicant of which the applicant is
enclosing the photocopy. Like this
Major P.C.Sahay(retired) has got
deposited total amount of Rs.86,000/
from me and my wife (4) But after some
days it came to know that the said
company has ran away along with the
lakhs of rupees of the depositors
after closing its office.”
21. In the First Information Report even
allegation of making assurance was not made against
the appellant but was made against Major P.C. Sahay
(Retd.), father of the appellant. There was no
allegation that the appellant fraudulently or
dishonestly induced the complainant to deposit
money. This Court in Arun Bhandari vs. State of
Uttar Pradesh and others, 2013 (2) SCC 801, has
held that it is necessary to show that a person had
fraudulent or dishonest intention at the time of
making the promise. A mere failure to keep up
promise subsequently cannot be presumed as an act
leading to cheating. An earlier twoJudge Bench
judgment of this Court in State of Kerala vs. A.
Pareed Pillai, 1972 (3) SCC 661, was quoted with
approval in paragraph 21. Paragraphs 21, 22, 23 and
24 which are relevant are to the following effect:
21. Before we proceed to scan and
analyse the material brought on record
in the case at hand, it is seemly to
refer to certain authorities wherein
the ingredients of cheating have been
highlighted. In State of Kerala v. A.
Pareed Pillai, a twoJudge Bench ruled
that: (SCC p. 667, para 16)
“16. … To hold a person guilty of
the offence of cheating, it has to
be shown that his intention was
dishonest at the time of making the
promise [and] such a dishonest
intention cannot be inferred from
[a] mere fact that he could not
subsequently fulfil the promise.”
22. In G.V. Rao v. L.H.V. Prasad,
2000 (3) SCC 693, this Court has held
thus: (SCC pp. 69697, para 7)
“7. As mentioned above, Section
415 has two parts. While in the
first part, the person must
‘dishonestly’ or ‘fraudulently’
induce the complainant to deliver
any property; in the second part,
the person should intentionally
induce the complainant to do or omit
to do a thing. That is to say, in
the first part, inducement must be
dishonest or fraudulent. In the
second part, the inducement should
be intentional. As observed by this
Court in Jaswantrai Manilal Akhaney
v. State of Bombay, AIR 1956 SC 575,
a guilty intention is an essential
ingredient of the offence of
cheating. In order, therefore, to
secure conviction of a person for
the offence of cheating, ‘mens rea’
on the part of that person, must be
established. It was also observed in
Mahadeo Prasad v. State of W.B., AIR
1954 SC 724, that in order to
constitute the offence of cheating,
the intention to deceive should be
in existence at the time when the
inducement was offered.”
23. In S.W. Palanitkar v. State of
Bihar, 2002 (1) SCC 241, it has been
laid down that: (SCC p. 250, para 21)
“21. … In order to constitute an
offence of cheating, the intention
to deceive should be in existence at
the time when the 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 leading to
cheating.”
24. In the said case while dealing
with the ingredients of criminal
breach of trust and cheating, the
Bench observed thus: (S.W. Palanitkar
case, SCC p. 246, paras 910)
“9. The ingredients in order to
constitute a criminal breach of
trust are: (i) entrusting a person
with property or with any dominion
over property, (ii) that person
entrusted (a) dishonestly
misappropriating or converting that
property to his own use; or (b)
dishonestly using or disposing of
that property or wilfully suffering
any other person so to do in
violation (i) of any direction of
law prescribing the mode in which
such trust is to be discharged, (ii)
of any legal contract made, touching
the discharge of such trust.
10. The ingredients of an offence
of cheating are: (i) there should
be fraudulent or dishonest
inducement of a person by deceiving
him, (ii)(a) the person so deceived
should be induced to deliver any
property to any person, or to
consent that any person shall
retain any property; or (b) the
person so deceived should be
intentionally induced to do or omit
to do anything which he would not
do or omit if he were not so
deceived; and (iii) in cases
covered by, (ii)(b) the act of
omission should be one which causes
or is likely to cause damage or
harm to the person induced in body,
mind, reputation or property.””
22. The Chief Judicial Magistrate while rejecting
the application of the appellant for seeking
discharge has not even referred to any allegation
or evidence on the basis of which it can be said
that ingredients of Section 420 IPC were made out
in the facts of the present case.
23. We are, thus, of the considered opinion that
in the present case ingredients of Section 420 IPC
were not made out so as to frame any charge under
Section 420 IPC against the appellant.
24. In the result, the appeal is allowed, the
order of the Chief Judicial Magistrate dated
28.02.2007 and the judgment of the High Court dated
21.10.2016 are set aside. The appellant shall stand
discharged from the charges under Section 420 IPC
in Case No.545 of 2002.
...........................J.
( A.K. SIKRI )
...........................J.
( ASHOK BHUSHAN )
NEW DELHI
AUGUST 25, 2017.
ITEM NO.3 COURT NO.6 SECTION II
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s). 2320/2017
(Arising out of impugned final judgment and order dated 21-10-2016
in CRLR No. 724/2007 passed by the High Court Of Judicature At
Allahabad)
SAMIR SAHAY @ SAMEER SAHAY Petitioner(s)
VERSUS
THE STATE OF UTTAR PRADESH & ANR. Respondent(s)
([FOR DIRECTIONS])
Date : 25-08-2017 This petition was called on for hearing today.
CORAM : HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE ASHOK BHUSHAN
For Petitioner(s) Mr. Pradeep Kant, Sr. Adv.
Mr. Braj Kishore Mishra, AOR
Mr. Divyanshu Sahay, Adv.
Mr. Amit Bhagat, Adv.
For Respondent(s) Mr. D.K. Singh, AAG
Ms. Komal Mudhra, Adv.
Mr. Saurabh Agrawal, Adv.
Mr. Ardhendumauli Kumar Prasad, AOR
Mr. Alok Kumar Pandey, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeal is allowed in terms of the signed order. Pending application(s), if any, stands disposed of accordingly.
(ASHWANI KUMAR) (MADHU NARULA) COURT MASTER COURT MASTER (Signed order is placed on the file)