Jharkhand High Court
Pawan Kumar Lakhotia vs The State Of Jharkhand on 26 April, 2024
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 3095 of 2021
1. Pawan Kumar Lakhotia, son of Rameshwar Lal Lalhotia, aged
about 62 years, resident of E-68, Keshri Kunj, Lunastreet,
Bidhannagar, Durgapur, Barddhaman, P.O. & P.S.--Durgapur,
Dist.-Durgapur, West Bengal
2. Rekha Devi Lakhotia, wife of Pawan Kumar Lakhotia, aged about
57 years, resident of E-68, Keshri Kunj, Lunastreet, Bidhannagar,
Durgapur, Barddhaman, P.O. & P.S.--Durgapur, Dist.-Durgapur,
West Bengal
3. Manish Kumar Lakhotia, son of Pawan Kumar Lakhotia, aged
about 38 years, resident of E-68, Keshri Kunj, Lunastreet,
Bidhannagar, Durgapur, Barddhaman, P.O. & P.S.--Durgapur,
Dist.-Durgapur, West Bengal
4. Piyush Kumar Lakhotia, son of Pawan Kumar Lakhotia, aged about
39 years, resident of E-68, Keshri Kunj, Lunastreet, Bidhannagar,
Durgapur, Barddhaman, P.O. & P.S.--Durgapur, Dist.-Durgapur,
West Bengal
5. Ashok Kumar Prasad, son of Ram Narayan Prasad, aged about 52
years, resident of Nittynanda Pally, Bartoria, P.O. & P.S.-Asansol,
Dist.-Asansol, West Bengal
.... Petitioners
Versus
1. The State of Jharkhand
2. Md. Shamim Khan, son of late Md. Khalil Khan, resident of Sugma
More, Near Kapasada weight bridge, P.O.-Mugma, P.S.-Nirsa, Dist.
Dhanbad
.... Opp. Parties
PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
.....
For the Petitioners : Mr. Pratik Sen, Advocate For the State : Mr. B.N. Ojha, Spl. P.P. For O.P. No.2 : Mr. R.S. Mazumdar, Sr. Advocate Cr.M.P. No.3095 of 2021 1 : Mrs. Jasvindar Mazumdar, Advocate : Mrs. Neeharika Mazumdar, Advocate .....
By the Court:-
1. Heard the parties.
2. Learned counsel for the petitioners submits that the petitioner no.1 has died hence, he does not press the petition on behalf of petitioner no.1.
3. Accordingly, this criminal miscellaneous petition is rejected as not pressed so far as the petitioner no.1 is concerned.
4. The learned counsel for the petitioners presses this criminal miscellaneous petition on behalf of the petitioner nos.2 to 5 only.
5. This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 Cr.P.C. with a prayer to quash the entire criminal proceeding in connection with Nirsa P.S. Case No. 249 of 2016, corresponding to G.R. No.3084 of 2016 including the order taking cognizance dated 26.03.2018 by which cognizance has been taken for the offences punishable under Section 504, 506, 406, 420, 341 and 34 of Indian Penal Code but no witnesses has been examined in this case, so far in the trial court.
6. The allegation against the petitioners is that the petitioner nos.2 to 4 being the directors and petitioner no.5 being the Manager of KRL Infratech (India) Ltd., employed the Hywa vehicle of the informant for five months six days, the total consideration amount payable to the informant is Rs.11,51,305/- but the petitioners have paid Rs.7,39,974/- and when the informant went to demand his outstanding dues, the petitioners threatened to kill the informant and throw his dead body inside the colliery.Cr.M.P. No.3095 of 2021
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7. It is submitted by the learned counsel for the petitioners that the allegation against the petitioners are false and there is no allegation against the petitioners of having any intention to deceive the informant who claims to be victim since the inception rather the materials in the record indicates that the case is to the contrary, as admittedly, the informant has been paid more than half of the claimed amount. It is next submitted by the learned counsel for the petitioners that this case is counter blast to Complaint Case No. 2122 of 2016 filed by the petitioner no.5. It is further submitted by the learned counsel for the petitioners that though the informant claims that he entered into an agreement with M/s KRL Infratech (India) Ltd. but as the said KRL Infratech (India) Ltd. has not been arraigned as an accused so the prosecution against the petitioners; without any specific allegation against them, is not maintainable. It is further submitted by the learned counsel for the petitioners that the dispute between the parties is at best a civil dispute and a cloak of criminal colour is tried to be given by the informant to harass the petitioners by falsely implicating them in a criminal case. It is next submitted by the learned counsel for the petitioners that the claim of the informant of Rs.4,11,331/- is on the basis of an invalid agreement the period of which expired since long. Learned counsel for the petitioners relied upon the judgment of Hon'ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Anr. reported in (2005) 10 SCC 336, paragraph no. 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) and submits that it is a settled principle of law that in order to constitute the offence of cheating the accused must have the intention to deceive the victim since the very beginning but if the intention to cheat develops later on, the same will not amount to cheating.
8. In this respect, learned counsel for the petitioners also relied upon the judgment of Hon'ble Supreme Court of India in the case of Dalip Kaur v. Jagnar Singh reported in (2009) 14 SCC 696, paragraph nos.8 to 10 of which reads as under:-
"8. Sections 405 and 415 of the Penal Code defining "criminal breach of trust" and "cheating" respectively read as under:
"405. Criminal breach of trust.--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 wilfully suffers any other person so to do, commits 'criminal breach of trust'.
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 Cr.M.P. No.3095 of 2021 4 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'."
An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating.
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 non-refunding 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 : 2003 SCC (Cri) 703] )"
9. Learned counsel for the petitioners next relied upon the judgment of Hon'ble Supreme Court of India in the case of Vijay Kumar Ghai v. State of W.B. reported in (2022) 7 SCC 124, paragraph nos. 28 and 38 of which reads as under:-
"28. "Entrustment" of property under Section 405 of the Penal Code, 1860 is pivotal to constitute an offence under this. The words used are, "in any manner entrusted with property". So, it extends to entrustments of all kinds whether to clerks, servants, business partners or other persons, provided they are holding a position of "trust".
A person who dishonestly misappropriates property entrusted to them contrary to the terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of the Penal Code. Cr.M.P. No.3095 of 2021 5
38. There can be no doubt that a mere breach of contract is not in itself a criminal offence and gives rise to the civil liability of damages. However, as held by this Court in Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] , the distinction between mere breach of contract and cheating, which is criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating. In the case at hand, complaint filed by Respondent 2 does not disclose dishonest or fraudulent intention of the appellants."
and submits that mere breach of contract is not in itself a criminal offence and gives rise to the civil liability of damages and fraudulent and dishonest intention is the basis of the offence of cheating.
10. Relying upon the judgment of Hon'ble Supreme Court of India in the case of Thermax Ltd. v. K.M. Johny reported in (2011) 13 SCC 412, paragraph no.39 of which reads as under:-
"39. Apart from the fact that the complaint lacks necessary ingredients of Sections 405, 406, 420 read with Section 34 IPC, it is to be noted that the concept of "vicarious liability" is unknown to criminal law. As observed earlier, there is no specific allegation made against any person but the members of the Board and senior executives are joined as the persons looking after the management and business of the appellant Company."
it is submitted by the learned counsel for the petitioners that the concept of vicarious liability is unknown to criminal law; hence, in the absence of any special allegation against the petitioner nos. 2 to 5, this criminal prosecution against them is not maintainable.
11. Hence, it is submitted that the prayer as made in this criminal miscellaneous petition be allowed.
Cr.M.P. No.3095 of 2021 6
12. Learned Spl. P.P. and the learned Senior Advocate appearing for the opposite party no.2 on the other hand opposes the prayer to quash the entire criminal proceeding in connection with Nirsa P.S. Case No. 249 of 2016, corresponding to G.R. Case No.3084 of 2016 including the order taking cognizance dated 26.03.2018 and submits that there is direct and specific allegation against the petitioners of having cheated and committed criminal breach of trust by not returning the money due and payable to the complainant. Hence, it is submitted that this criminal miscellaneous petition being without any merit be dismissed.
13. Having heard the submissions made at the Bar and after going through the materials in the record, it is pertinent to mention here that it is a settled principle of law, as has been settled 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 :-
"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) Cr.M.P. No.3095 of 2021 7 that to make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the accused. It must also be shown that the accused persons dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the accused persons did not pay the money to the complainant does not amount to criminal breach of trust.
14. Now coming to the facts of the case, so far as the offence punishable under Section 406 of Indian Penal Code is concerned, the only allegation against the petitioners is that they have not paid some of the amount due and payable to the complainant. There is no allegation of any dishonest misappropriation of the same by the petitioners. Under such circumstances, this Court is of the considered view that the offence punishable under Section 406 of Indian Penal Code is not made out.
15. So far as the offence punishable under Section 420 of Indian Penal Code is concerned, as already being referred to above in this judgment, it is a settled principle of law that in order to constitute the offence of cheating, deception of the victim since the beginning is a sine-qua-non.
16. Now coming to the facts of the case, admittedly, the petitioners have paid an amount of Rs.7,39,974/- to the informant. Thus, by no stretch of imagination it can be said that the petitioners had any intention to deceive, since the beginning. Under such circumstances, this Court is of the considered view that even if the entire allegation made in the FIR are considered to be true in its Cr.M.P. No.3095 of 2021 8 entirety, still the offence punishable under Section 420 of Indian Penal Code is not made out.
17. So far as the offence punishable under Sections 506 and 504 of Indian Penal Code is concerned, it is a settled principle of law as has been held by the Hon'ble Supreme Court of India in the case of Vikram Johar vs. State of Uttar Pradesh & Anr. reported in (2019) 14 SCC 207, paragraph nos. 24 of which reads as under :-
"24. Now, we revert back to the allegations in the complaint against the appellant. The allegation is that the appellant with two or three other unknown persons, one of whom was holding a revolver, came to the complainant's house and abused him in filthy language and attempted to assault him and when some neighbours arrived there the appellant and the other persons accompanying him fled the spot. The above allegation taking on its face value does not satisfy the ingredients of Sections 504 and 506 as has been enumerated by this Court in the above two judgments. The intentional insult must be of such a degree that should provoke a person to break the public peace or to commit any other offence. The mere allegation that the appellant came and abused the complainant does not satisfy the ingredients as laid down in para 13 of the judgment of this Court in Fiona Shrikhande [Fiona Shrikhande v. State of Maharashtra, (2013) 14 SCC 44 : (2014) 1 SCC (Cri) 715] . (Emphasis supplied) that in order to constitute the offence punishable under Section 504 of Indian Penal Code, there must be intentional insult of such a degree that should provoke a person to break the public peace or to commit any other offence.
18. Now coming to the facts of the case, there is no allegation against the petitioners of having committed any intentional insult of the informant or anybody else of such a degree that should provoke the informant or anybody else to break public peace or commit any other offence and in the absence of that, this Court is of the considered view that even if the allegation made against the petitioners are considered to be true in its entirety, still the offence Cr.M.P. No.3095 of 2021 9 punishable under Section 504 of Indian Penal Code is not made out.
19. So far as the offence punishable under Section 506 of Indian Penal Code is concerned, it is pertinent to mention here that there is alleged dispute relating to payment of money by the petitioners to the informant. There was a business relation between the two for a considerable period of time and part of the money has been paid.
20. Under such circumstances, it is not difficult to fathom that the allegation of commission of offence punishable under Section 506 or 341 of Indian Penal Code have been made only for the purpose of exaggerating the offence and by and large and ornamental allegation.
21. In view of the discussion made above, this Court is of the considered view that continuation of the criminal proceeding against the petitioners, having been done to give a cloak of criminal case to a purely civil dispute. Hence, continuation of the criminal proceeding will amount to abuse of process of law and this is a fit case where the entire criminal proceeding in connection with Nirsa P.S. Case No. 249 of 2016, corresponding to G.R. No.3084 of 2016 including the order taking cognizance dated 26.03.2018 be quashed and set aside.
22. Accordingly, the entire criminal proceeding in connection with Nirsa P.S. Case No. 249 of 2016, corresponding to G.R. No.3084 of 2016 including the order taking cognizance dated 26.03.2018 is quashed and set aside.
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23. In the result, this criminal miscellaneous petition is allowed.
(Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 26th April, 2024 AFR/Sonu-Gunjan/-
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