Delhi District Court
Offence Under Section 406 Ipc. In The ... vs . on 19 December, 2013
IN THE COURT OF SHRI RAJ KUMAR TRIPATHI
CHIEF METROPOLITAN MAGISTRATE (SOUTH),
SAKET COURTS COMPLEX, NEW DELHI
State v. Brahm Arenja & Others
PS EOW
FIR No. 55/11
U/S. 406/420/120B IPC
19.12.2013
ORDER ON CHARGE
1.This order shall decide the aspect of framing charge qua the accused Brahm Arenja.
2. Complainant Mr. Rajiv Rattan is a businessman by profession. He filed a written complaint with the police on 17th March, 2010 claiming that the accused Brahma Arenja in conspiracy with other accused persons, namely, Ajay Ahlawat, Sangeeta Ahlawat and Brinda Arenja cheated him to the tune of Rs. 6.45 crores by fraudulently inducing him to agree to purchase a piece of land measuring 7 bighas 9 biswas in khasra no. 459 (115), 460 (311), 483(23) situated in village Satbari, New Delhi. It was alleged that the aforesaid land was neither owned by the accused nor was free from encumbrances.
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3. He alleged that the accused Ajay Ahlawat met him in year 2005 and introduced himself as a person having close contacts with government authorities. He told him that he had several projects in his mind where he could invest his money and as an example he could invest in the aforesaid land as the same could appreciate in value in near future. It was represented to him by accused Ajay Ahlawat that he knew Brahma Arenja and Brinda Arenja, owners of the aforesaid land and could get the transaction of the land carried out swiftly. Accused Ajay Ahlawat allegedly made a rosy picture and enticed the complainant to enter into transaction qua the land. It is further alleged that the accused persons misrepresented the facts and did not reveal that the aforesaid land was under land acquisition proceedings and was covered under notifications issued under sections 4 & 6 of Land Acquisition Act. Complainant avers that he came to know about the land acquisition notifications only when he read in the newspapers that the Apex Court had upheld the validity of notifications issued by Government.
4. Pursuant to the representation made by the accused Ajay Ahlawat and his wife Sangeeta Ahlawat, he made a payment of Rs. 6.45 crores in various stages in year 2007 through cheques to the accused persons. After making the payment, the accused Ajay Ahlawat was required to get the sale FIR No. 55/11 State v. Brahm Arenja and Others 2/12 documents prepared and get them signed by Mrs. and Mr. Arenja but he did not keep his promise. When the sale document was not executed as promised, the complainant sent a legal notice dt. 08.12.2009 for refund of his money. Accused Ajay Ahlawat replied back thereby accepting the payment of money. The complainant thus alleges that all the accused in furtherance of criminal conspiracy cheated him and misappropriated his money.
5. FIR was registered on 23th March, 2011. Investigation commenced. On conclusion of investigation, charge sheet under sections 406/420/120B IPC was filed against the accused Brahm Arenja, Ajay Ahlawat and Sangeeta Ahlawat. Accused Brinda Arenja was not charge sheeted. Cognizance of the offences was taken. The accused, who were charge sheeted, were summoned.
6. It is pertinent to mention that during the course of investigation, Ajay Ahlawat and Sangeeta Ahlawat amicably settled the dispute with the complainant and they moved a petition before the Hon'ble Delhi High Court for quashing the FIR qua them. Vide order dt. 01.10.2013 proceedings qua the accused Ajay Ahlawat and Sangeeta Ahlawat stands stayed by Hon'ble Delhi High Court.
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7. I have heard and considered the submissions advanced by learned APP for the State, learned counsel for the complainant and learned counsel for accused Brahm Arenja and also perused the record of the case.
8. At the stage of framing of charge, evidence of prosecution has not yet commenced. Accordingly, only the sufficiency of ground for proceeding against the accused on a general consideration of materials placed before the Court by the investigating police officer are to be considered. Truth, veracity and effect of the evidence which the prosecution proposes to adduce are not to be meticulously judged. Same standard in appreciation of evidence as would be applied at trial to find whether accused is guilty is not exactly to be applied at the stage of consideration of framing a charge. At that stage even a very strong suspicion founded on materials before the Court which leads the Court to form a presumptive opinion as to existence of factual ingredients constituting the offence alleged, may justify the framing of charge against the accused in respect of the commission of that offence.
9. The prosecution has invoked section 406 IPC against the accused Brahm Arenja on the allegation that he misappropriated the money that was entrusted to him by the complainant towards the sale transaction. It is to be FIR No. 55/11 State v. Brahm Arenja and Others 4/12 noted that for the applicability of section 406 IPC the very first requirement is that the property must have been 'entrusted'. Where the property has not been 'entrusted', section 406 IPC can have no application. For section 406 IPC it is essential that the property which is alleged to have been misappropriated was in fact 'entrusted' to the accused. In other words, 'entrustment' of the property in question is the sine qua non to make out an offence under section 406 IPC. In the case reported as State of Gujarat vs. Jaswantlal Nathalal AIR 1968 SC 700 elaborating on the expression "entrustment" the Apex Court observed: "Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the ownership of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner. But that does not mean that such an entrustment need conform to all the technicalities of the law of trust. The expression entrustment carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner. Further the person handing over the property must have confidence in the person taking the property so as to create a FIR No. 55/11 State v. Brahm Arenja and Others 5/12 fiduciary, relationship between them."
10. 'Entrustment' requires that the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. It also carries with itself the implication that the person handing over the property continues to be owner thereof. In the present case, I find that there was no such intention on the part of the complainant to create any such fiduciary relationship with the accused. It is well settled that money paid towards sale transaction is no 'entrustment' in the eyes of law. Advance money for purchase of land has to be viewed as such and not as 'entrustment'. In a sale transaction, the vendee does not intend to 'entrust' the sale money with the vendor with a view to take it back later on. He pays the sale money towards the performance of the contract and does at all not 'entrust' the same. The mere fact that the contract did not materialize would not mean that the nature of transaction would alter itself from that of a sale transaction to one of 'entrustment'. On the basis of the facts as set out in the charge sheet, the ingredients of the offence under section 406 IPC are not satisfied. The element of 'entrustment' which is sine qua non to make out an offence under section 406 IPC is missing in the present case. And inasmuch as the element of FIR No. 55/11 State v. Brahm Arenja and Others 6/12 ' entrustment' is entirely missing, no case for framing of charge under section 406 IPC is made out against the accused Brahm Arenja. He accordingly stands discharged for the offence punishable under section 406 IPC.
11. That apart, offences of cheating and criminal breach of trust on the same set of facts cannot go simultaneously. This is because the mens rea in section 406 IPC comes into play only later on after the entrustment is complete; whereas in section 420 IPC the mens rea is there right at the very inception of the transaction.
12. Now comes section 420 IPC. For the purpose of establishing an offence under section 420 IPC it is essential that there must be deception on the part of the accused. The deception must precede and thereby induce the person to deliver any property; or to commit any of the acts as mentioned in the section. Generally speaking 'deceiving' is to lead into error by causing a person to believe what is false or to disbelieve what is true, and such deception must be by words or by conduct. Next, the second essential ingredient of the offence of cheating is the element of 'inducement' leading to either delivery of property or doing of an act as mentioned in the section. The crucial aspect about the offence of cheating is that the dishonest FIR No. 55/11 State v. Brahm Arenja and Others 7/12 intention must be present at the time of making the promise.
13. In the case at hand, the complainant is a businessman. At the time of the transaction, he held a very important position in M/s India Bulls, a company involved in business of real estate development. From a bare perusal of the complaint, it is very evident that the complainant had entered into a speculative transaction with a view to earn high profits on account of appreciation in land value. On prima facie considerations, from the standpoint of a reasonable and prudent man, I am not at all inclined to believe that such a person would part with a huge sum of money to the tune of Rs. 6.45 crores as full consideration amount without verifying the antecedents of the vendors and the status of land in question. It is highly improbable that a person who is in the business of real estate development would part with the entire consideration amount for the purchase of property without even insisting on execution of any sale deed, much less an agreement to sale. This appears to be beyond the realm of reality. Moreover, from a bare perusal of the complaint it transpires that the accused Brahm Arenja never met the complainant. At least, there are no allegations to this effect in the entire body of the complaint as to when did he meet the accused Brahm Arenja. From perusal of the complaint, it is FIR No. 55/11 State v. Brahm Arenja and Others 8/12 revealed that his entire transaction and dealings were with the accused Ajay Ahlawat. Therefore, it cannot be said that the accused Bram Arenja induced the complainant.
14. Next, the alleged transaction took place in the year 20062007 but the complainant woke up from his slumber to get the FIR registered 45 years later in 2011. In normal course of things, this would appear to be highly unusual. This was perhaps done because his civil remedies had become time barred. What is very interesting is that after investing such a huge sum of money in 2007, the complainant showed no urgency at all in getting the sale deed executed in his favour at the earliest. His first legal notice in this context was issued only on 08.12.2009, a good twothree years later. What also seems to be intriguing is that in this entire transaction there was also an assurance of close contacts with the government authorities. As to why such an assurance was given and accepted whole heartedly by the complainant, would only be within the knowledge of the complainant. To me, it appears that the complainant had something in his mind to the effect that the land in question was facing some hurdle at the level of government which could only be sorted out through close contacts with government authorities. It would not be out of place to mention here FIR No. 55/11 State v. Brahm Arenja and Others 9/12 that the complainant swung into action only when the Apex Court upheld the validity of the land acquisition notifications. It does appear that the complainant is hiding more than what he is revealing in his complaint. It seems that a section of the public at large is under a misplaced belief that all kinds of cooked up facts prevail in court. From the material available on record, it is revealed that the complainant has tried to convert his civil dispute into a criminal one. It is also pertinent to mention that in his legal notice dt. 08.12.2009, the complainant had demanded 'refund of money' allegedly paid to the accused persons. In the case reported as S. W. Palanitkar vs. State of Bihar, AIR 2000 SC 4916, it has been held by the Apex Court that 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. In the case at hand, for the aforesaid multiple reasons, it does not at all appear that the accused Brahm Arenja had any mens rea so as to make out an offence of cheating. It bears repetition to state that he admittedly never met the complainant and as such there can be no question of inducement or deception on his part.
15. Thus, on the conspectus of the material placed on record by the prosecution, charge for the offence under section 420 IPC is also not made FIR No. 55/11 State v. Brahm Arenja and Others 10/12 out against the accused Brahm Arenja. He is accordingly discharged of the offence punishable under section 420 IPC.
16. The prosecution has lastly invoked the offence of criminal conspiracy punishable under section 120B IPC. Section 120B IPC can be invoked when the accused have agreed to do or cause to be done an illegal act or a legal act by illegal means. In the case at hand, the accused Brahm Arenja has not committed the offences of cheating or criminal breach of trust as alleged. That is to say, the accused Brahm Arenja has done no illegal act and neither adopted any illegal means to do any legal act. The offence of conspiracy punishable under section 120B IPC is also not made out.
17. There is a growing tendency in the business circles to convert purely civil disputes into criminal cases. This is on account of the fact that it is a general belief that civil remedies are time consuming and do not adequately protect the interests of the lenders and the creditors. These observations were made by the Apex Court in the case reported as Indian Oil Corporation Vs. NEPC India Ltd. MANU/SC/3152/2006. The present case also is a stark example of the situation where purely civil dispute has been conveniently turned into a criminal case by making FIR No. 55/11 State v. Brahm Arenja and Others 11/12 assertions and allegations on a complete afterthought with a cool and calculated mind in order to somehow implicate the accused persons. The whole attempt of the complainant has been to rope in the accused on the fond belief that the case would put pressure upon them to part with the money. This was done in order to browbeat and tyrannize the accused of criminal prosecution.
18. For the foregoing reasons, accused Brahm Arenja stands discharged of the offences under sections 420/406/120B IPC. His bail bond and surety bond is extended for a period of six months from today. File be consigned to Record Room.
Announced in the open Court today i.e. 19.12.2013 (RAJ KUMAR TRIPATHI) Chief Metropolitan Magistrate (South) Saket Courts, New Delhi/19.12.2013 FIR No. 55/11 State v. Brahm Arenja and Others 12/12