Orissa High Court
An Appeal Under Section 13 Of The Odisha ... vs State Of Orissa & Another on 27 August, 2018
Author: S. K. Sahoo
Bench: S.K. Sahoo
IN THE HIGH COURT OF ORISSA, CUTTACK
CRLA No. 231 Of 2017
An appeal under section 13 of the Odisha Protection of Interests
of Depositors (in Financial Establishments) Act, 2011 from the
order dated 23.11.2015 passed by the learned Presiding Officer,
Designated Court, OPID Act, Cuttack in C.T. Case No. 07 of
2014.
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Gajanan Property Dealer
and Construction Pvt. Ltd
and Ors. ........ Appellants
-Versus-
State of Orissa & another ........ Respondents
For Appellants: - Mr. Susanta Kumar Dash
For State of Orissa: - Mr. Bibekananda Bhuyan
Addl. Govt. Advocate
For Respondent No.2: - None
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P R E S E N T:
THE HONOURABLE MR. JUSTICE S.K. SAHOO
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Date of Judgment: 27.08.2018
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S. K. SAHOO, J. Why everybody wants a house of his own? It is not
just a basic need of a human being, a primal urge or just a place
made of four walls and a roof thereon but a place where he lives
2
with his family safely, secured and healthy. It gives him comfort,
peace and stability, to imagine things in a better manner and to
act for the goodness of the society and the nation. Charles
Dickens quotes, "Charity begins at home and justice begins next
door".
This case depicts the attempts made by Hindustan
Aeronautics Limited Housing Committee, Koraput Division,
Sunabeda (hereafter 'HAL Housing Committee') to bring a
housing project at Bhubaneswar for the employees of HAL and
the alleged misappropriation, cheating, forgery committed by the
appellants in not fulfilling the terms and conditions of the
agreement executed between the parties for such purpose.
The appellants have filed this appeal under section 13
of the Odisha Protection of Interests (in Financial Establishments)
Act, 2011 (hereafter 'OPID Act') challenging the impugned order
dated 23.11.2015 passed by the learned Presiding Officer,
Designated Court, OPID Act, Cuttack in C.T. Case No. 07 of 2014
in rejecting the petition dated 17.10.2015 filed by the appellants
under section 239 of Cr.P.C. for discharge and consequently
framing charges under sections 420, 406, 467, 468 read with
section 120-B of the Indian Penal Code and section 6 of the OPID
Act.
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2. On 27.04.2014 the respondent no.2 Rajaram
Mohanty, Additional General Manager (Overhaul), Sukhoi Engine
Division, Sunabeda-2 for HAL Housing Committee lodged the first
information report before the Superintendent of Police, Economic
Offences Wing, Bhubaneswar stating therein that HAL Housing
Committee is a sub-committee of Hindustan Aeronautics
Employee Welfare Fund (in short 'HAEWF') constituted for
providing houses to its 540 committee members. HAEWF was
registered under the Societies Registration Act and it was
decided and resolved by the General Body of sub-committee to
have a housing project at Bhubaneswar for its members who are
employees of HAL and accordingly funds were collected from its
members. The appellant no.2 Niranjan Parida, Managing Director
of M/s. Gajanan Property Dealer & Construction Pvt. Ltd.
(hereafter 'the Company') representing and managing the
company, approached HAL Housing Committee with a proposal to
provide the required land of fifty acres in Mouza- Jagannath
Prasad, Bhubaneswar and accordingly an agreement was
executed on 04.02.2009 with a condition that the appellant no.2
would provide land @19.35 lakhs per acre including the cost of
land, cost of registration, conversion, mutation and payment of
revenue tax upto date of registration within the stipulated period
of 31.03.2009 to the individual committee members. The
4
appellant no.2 was given Rs.50,00,000/- (rupees fifty lakhs) as
advance for the said purpose but he could not arrange the land
during the period of agreement.
It is further stated in the first information report that
since the appellant no.2 could not provide the required land at
Mouza- Jagannath Prasad, he persuaded the committee members
promising to provide the required fifty acres of land in Mouza-
Dhauli Kausalyapur and accordingly, the second agreement was
entered into on 31.07.2009 with a condition to provide land
@Rs.20.50 lakhs per acre including the cost of land, cost of
registration, conversion, mutation and payment of revenue tax
upto the date of registration within the stipulated period of
30.09.2009 to the individual committee members. The appellant
no.2 managed to register around ten acres of land in Mouza-
Dhauli Kausalyapur in the name of the committee members after
receiving an amount of Rs.2.15 crores. The amount was
transferred from the committee account to the company account
of ICICI Bank, Nayapalli Branch, Bhubaneswar but the appellant
no.2 failed to arrange the balance land of forty acres during the
agreement period.
It is further stated in the first information report that
the appellant no.2 again came to the committee with a proposal
for providing compact land of fifty acres in Mouza- Giringaput
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and Bhagabatipur, Bhubaneswar and accordingly, the third
agreement was executed on 01.01.2010 with a condition to
provide fifty acres of land @Rs.22.30 lakhs per acre including the
cost of land, cost of registration, conversion, mutation and
payment of revenue tax upto date of registration in Mouza-
Giringaput and Bhagabatipur within stipulated period of
31.10.2010 to the individual committee members. The ten acres
of land in Mouza- Dauli Kausalyapur which was registered the
name of the committee was returned to the appellant no.2.
It is further stated in the first information report that
the appellant no.2 managed to acquire 48.510 acres of land in
Mouza- Giringaput and Bhagabatipur and registered around
42.151 acres of land in the name of the committee, however he
with an illegal intention and ulterior motive, registered the
balance land measuring 6.359 acres in his own name without
registering the same in the name of the committee. The
appellant no.2 cunningly kept the said land as those were
connecting road to the house sites. He had received an amount
of Rs.8.62 crores in addition to the amount of Rs.2.65 crores
which he had already received earlier. The cost of the land
registered in the name of the committee came to Rs.9.40 crores,
whereas the appellant no.2 had received an amount of Rs.11.27
crores and thus the balance amount of Rs.1.87 cores remained
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with the appellant no.2. It is stated that the amount was
transferred from the committee account to the company account
no.028405003638 of ICICI Bank, Nayapalli Branch, Bhubaneswar
through RTGS. The committee ascertained later on that out of
the land registered in the name of the committee, an area of
Ac.14.00 fell under the category of "Chhota Jungle". The
appellant no.2 did not register the land in the name of the
individual committee members as per the conditions of the
agreement for which an amount of Rs.42.28 lakhs was marked
as expenses on this head.
It is further stated in the first information report that
as per the third agreement, it was agreed upon between the
parties to develop the acquired land before 31st January 2011 but
no development took place during the period for which the period
was extended upto 31st March 2012 by the minutes of the
meeting dated 25th July 2011 agreed and signed by both the
parties & again it was extended upto 10th June 2012 by the
minutes of the meeting dated 22-24/01/2012 agreeing upon the
rates annexed to the said minutes of meeting.
It is further stated in the first information report that
on the request of the appellant no.2, an amount of rupees fifty
five lakhs was paid to him as advance through RTGS to his
company account no.028405003638 of ICICI Bank, Nayapalli
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Branch, Bhubaneswar for development of the land out of the
contract amount of Rs.5.06 crores. After receiving the advance
amount, the appellant no.2 did not do any developmental work
and on repeated approaches, he demanded more money to start
the development work. After repeated reminders, the appellant
no.2 did not turn up to settle his account and he cunningly took
away the excess amount from the committee and created
compelling circumstances to fall in his trap. In spite of several
requests and reminders, the appellant no.2 did not hand over the
original sale deeds of the land arranged and sold by him. He did
not hand over the relevant connected documents and also did
not do anything regarding conversion and mutation of the
property. He deliberately did not return the land purchased in his
name by utilizing the money of the committee and registered the
connecting roads in his name with an ulterior motive.
It is further stated in the first information report that
the appellant no.2 had misappropriated an amount of Rs.2.84
crores (an amount of Rs.1.87 crores for the land, Rs.55 lakhs as
advance for development of site and Rs.42 lakhs for registration
and conversion charges) for which proper legal action is
necessary to be initiated against him for recovery of the land
measuring area Ac.6.359 purchased in his name by utilizing the
committee money and the excess amount Rs.2.84 crores taken
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by him and that the appellant no.2 had kept all the original
documents with him with an ulterior motive.
It is further stated in the first information report that
at the time of taking possession of the land, it was noticed that
during land procurement, the land broker engaged by the
appellant no.2 and the land owners were not paid their dues as
per the promises and assurances made to them, which is against
the spirit and interest of the agreement and therefore, the
appellant no.2 had committed breach of trust by not utilizing the
money for which he had received the amount. The informant
remained unaware as to how much land was free from dispute as
the appellant no.2 illegally held all the original documents and
the entire linked documents with him with an intention to put the
committee in deep trouble.
3. On the basis of the first information report lodged by
the opposite party no.2 Rajaram Mohanty, E.O.W., P.S.,
Bhubaneswar Case No.11 dated 27.04.2014 was registered
under sections 420, 406, 467, 468 read with section 120-B of the
Indian Penal Code and section 6 of the OPID Act.
During investigation of the case, it was ascertained
that HAEWF is a registered society whose objective is to provide
housing plots to its committee members. After obtaining a good
response from HAL employees to develop a plotted scheme at
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Bhubaneswar, advance amount of Rs.51,000/- for category-I,
Rs.46,000/- for category-II and Rs.41,000/- for category-III
along with non-refundable deposit of Rs.1000/- towards
membership was deposited by the interested members.
E.O.W., P.S., Bhubaneswar Case No. 33 of 2013 was
instituted on 28.12.2013 under sections 406/420/34 of the
Indian Penal Code on the written report of Sumanta Kumar
Behera, employee of HAL against the respondent no.2 Rajaram
Mohanty and other members of HAL Housing Committee on the
allegation of inviting applications from HAL employees to provide
land for housing purpose, collecting money and though obtaining
their signatures in the sale deeds at factory premises for
registration of lands at Giringaput and Bhagabatipur but neither
the accused persons in that case handed over the plots nor
refunded the amount paid by the informant of that case in spite
of repeated request rather demanded more money in the pretext
of development charges and stated that if he failed to comply the
demand, they would not be responsible for the possession of the
land.
During course of investigation of E.O.W., P.S.,
Bhubaneswar Case No. 33 of 2013, it was found that HAL
Housing Committee has not cheated the individual members
rather the company cheated the members of the HAL. During
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physical verification of the project, it was ascertained that some
of lands purchased by HAL Housing Committee were in their
possession and the rest lands were not in their possession. A
letter was sent by the Investigating Officer to the respondent
no.2 Rajaram Mohanty to intimate the actual area of land in
possession of HAL Housing Committee and the value of the land.
The HAL Housing Committee in its letter dated 28.04.2015
intimated that the revenue land of Ac.4.572 with a clear title had
been arranged by the company in the name of individual
members and the rest of the lands are litigated without clear
transferable title and not in their possession. It was further found
that the total loss incurred by HAL Housing Committee is
Rs.10,80,04,440/- It was ascertained that the appellant no.2 as
Managing Director of the Company and the appellant no.3
Lilumanjari Parida, Director of the Company made conspiracy
with each other and they fabricated false documents with a
dishonest intention to cheat HAL Housing Committee with whom
agreements have been entered into. They collected crores of
rupees from the HAL Housing Committee with dishonest
intention and diverted the same for their personal gain. The
appellants defaulted and failed to provide the rest land and thus
the investigating officer was of the opinion that the appellants
nos. 2 and 3 have cheated the HAL Housing Committee and
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members of HAL and thereby they misappropriated the hard-
earned money of the employees to the tune of
Rs.10,80,04,440/- excluding interests beyond 10.06.2012.
Accordingly, while submitting final report in E.O.W., P.S.,
Bhubaneswar Case No. 33 of 2013, charge sheet was placed in
E.O.W., P.S., Bhubaneswar Case No.11 of 2014 against the
appellants under sections 420, 406, 467, 468 read with section
120-B of the Indian Penal Code and section 6 of the OPID Act on
12.05.2015.
4. Mr. Susanta Kumar Dash, learned counsel for the
appellants contended that as per the agreement between the
appellant-company and HAL Housing Committee for a housing
project over the land having an extent of Ac.50.00 at
Bhubaneswar, the appellant-company arranged almost the
required land but the HAL Housing Committee started
negotiating with others for entrusting the construction of houses
over the lands acquired through the appellant-company in
violation of the terms of agreement which stipulated the
appellant-company to be entrusted with the construction of
houses. Being aggrieved by the conduct of the HAL Housing
Committee, the appellant-company instituted a civil suit bearing
C.S. No.502 of 2012 on 18.04.2012 against HAL Housing
Committee relating to the issues involved in the criminal case
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which is subjudiced in the Court of learned Civil Judge, Senior
Division, Bhubaneswar wherein the plaintiff prayed for passing a
decree of permanent injunction restraining the defendant from
entering into any agreement with any third party with regard to
the construction work over the suit property, with a further
prayer for a direction to the defendant to co-operate with the
plaintiff for supplying necessary finance for construction work
over the suit property and to execute fresh agreements to that
effect by supplying drawing, specification etc. of the work to be
done. An application for ad-interim injunction vide I.A. No.351 of
2012 under Order XXXIX Rules 1 & 2 read with section 151 of
Code of Civil Procedure was also filed by the appellant-company
with a prayer to restrain the HAL Housing Committee from
engaging any other person/firm/company for executing the
development and construction of the housing project over the
suit land and though HAL Housing Committee has not filed the
written statement in the Civil Suit but show cause/objection has
been filed to I.A. No.351 of 2012. It is further contended that
since the appellant-company instituted the aforesaid suit, the
HAL Housing Committee, in order to harass and pressurize the
appellants to abandon their claim with regard to the construction
of houses, initiated the criminal prosecution and during pendency
of the criminal proceeding, the HAL Housing Committee entered
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into agreement with the third parties for construction of the
houses. It is further contended that the allegation leveled in the
F.I.R. that to the utter surprise of the informant, an area of
Ac.14.00 dec. from out of the land registered in the name of the
committee was found under the category of 'Chhota Jungle', is a
motivated one inasmuch as HAL Housing Committee presented a
writ petition before this Court on 11.01.2011 vide W.P.(C)
No.834 of 2011 which is more than three years prior to the
lodging of the first information report and in that writ petition,
the HAL Housing Committee claimed change of Kissam of the
Stitiban land from 'Chhota Jungle' to 'Gharabadi' on the basis of
field position as well as report of the Revenue Inspector dated
12.10.2010 obtained on the strength of the application of the
committee. It is further submitted that the facts narrated in the
charge sheet that the HAL Housing Committee is in possession of
only four acres of land is completely false inasmuch as an
agreement has been signed between the HAL Housing Committee
and one Pravakar Swain for the development work for thirty
acres of land and after Pravakar Swain left the work, it was given
to another organization namely AD Dwellers Pvt. Ltd. and the
said company has made construction work of the boundary wall
of more than thirty acres of land but thereafter he also left the
work. It is vehemently contended that the dispute between the
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parties is essentially civil in nature and it has been given the
colour of a criminal case. It is argued that there is no reasonable
basis for the foundation of the accusation and the ingredients of
the offences are totally lacking and the investigation has been
done in a perfunctory manner and the learned Designated Court
mechanically rejected the petition under section 239 of Cr.P.C.
and framed charges against the appellants and therefore, the
impugned order should be set aside. During course of hearing,
the learned counsel for the appellants filed affidavits dated
11.01.2018 and 22.03.2018 annexing various documents which
were taken on record. Learned counsel for the appellants relied
upon the decisions of the Hon'ble Supreme Court in the cases of
Thelapalli Raghavaiah -Vrs.- Station House Officer
reported in (2007) 37 Orissa Criminal Reports (SC) 358,
Suneet Gupta -Vrs.- Anil Triloknath Sharma reported in
(2008) 40 Orissa Criminal Reports (SC) 578 , Inder Mohan
Goswami -Vrs.- State of Uttaranchal reported in (2008) 39
Orissa Criminal Reports (SC) 188, Joseph Salvaraj A.
-Vrs.- State of Gujarat reported (2011) 49 Orissa Criminal
Reports (SC) 924, Devendra -Vrs.- State of U.P. reported
in (2009) 43 Orissa Criminal Reports (SC) 680, Alpic
Finance Ltd. -Vrs.- P. Sadasivan reported in A.I.R. 2001
S.C. 1226, Hridaya Ranjan Pd. Verma -Vrs.- State of Bihar
15
reported in A.I.R. 2000 S.C. 2341, Md. Ibrahim -Vrs.- State
of Bihar reported in (2009) 8 Supreme Court Cases 751,
Popular Muthiah -Vrs.- State of Tamil Nadu reported in
(2006) 34 Orissa Criminal Reports (SC) 749 and State of
Orissa -Vrs.- Devendra Nath Padhi reported in (2005) 30
Orissa Criminal Reports (SC) 177.
Mr. Bibekananda Bhuyan, learned Addl. Govt.
Advocate on the other hand contended that the first information
report indicates that despite an agreement between the parties
and receipt of a sizable amount belonging to the members of HAL
Housing Committee, the appellants acquired Ac.41.219 dec. of
land and managed to record Ac.7.073 dec. of land in their names
and out of the lands registered in the name of the Committee by
the appellants, 14 acres fell under the category of 'Chhota
Jungle'. It is contended that the appellants were fully aware that
the 14 acres of lands were inalienable in view of the provisions of
the Forest (Conservation) Act, 1980 and the decision of the
Hon'ble Supreme Court in the case of T.N. Godavaraman. No
permission as required under the Orissa Communal Forest and
Private Lands (Prohibition of Alienation) Act, 1948 (Act 1 of
1948) (hereafter '1948 Act') was obtained from the Collector and
thus fraud has been perpetuated and the so-called alienation are
mere eye wash being contrary to law. The appellants having
16
taken the consideration money have defrauded the informant's
society by alienating 'Jungle kissam' of land in spite of statutory
prohibition. It is further contended that though the appellants by
way of affidavits have filed several documents to indicate that
the informant was aware about the Kissam of land and as such
they cannot be held liable for fraud because of statutory
prohibition, but those documents were neither produced before
the learned trial Court during consideration of the application for
discharge nor taken as grounds at the time of filing of the appeal
and therefore, those documents and contentions cannot be taken
into account in the present appeal. Learned counsel relied upon
the decisions in cases of Chandradhoja Sahoo -Vrs.- State of
Orissa reported in (2012) 13 Supreme Court Cases 419,
Smt. Basanti Kumari Sahu -Vrs.- State of Orissa reported
in 81 (1996) Cuttack Law Times 571, State of Orissa -Vrs.-
Dillip Kumar Sahoo reported in 2017 (I) Orissa Law
Reviews 214, Birendra Nath Das -Vrs.- State of Orissa
reported in 123 (2017) Cuttack Law Times 752 and
Chandradhoja Sahoo -Vrs.- Member, Board of Revenue,
Orissa reported in 2009 (II) Orissa Law Reviews 8.
17
Scope of discharging an accused under section 239 of
Cr.P.C.
5. Section 239 of Cr.P.C., inter alia, provides that if
upon considering the police report and the documents sent with
it under section 173 of Cr.P.C. and making such examination, if
any, of the accused and after giving prosecution and accused an
opportunity being heard, the Magistrate considers the charge
against the accused to be groundless, he shall discharge the
accused and record his reasons for so doing. The object of
discharge under section 239 of Cr.P.C. is to save the accused
from unnecessary and prolonged harassment. When the
allegations are baseless or without foundation and no prima facie
case are made out, it is just and proper to discharge the accused
to prevent abuse of process of the Court. If there is no ground
for presuming that accused has committed an offence, the
charges must be considered to be groundless. The ground may
be any valid ground including the insufficiency of evidence to
prove the charge. When the materials at the time of
consideration for framing the charge are of such a nature that if
unrebutted, it would make out no case whatsoever, the accused
should be discharged. Appreciation of evidence is an exercise
that this Court is not to undertake at the stage of consideration
18
of the application for discharge. The truth, veracity and effect of
the materials proposed to be adduced by the prosecution during
trial are not to be meticulously adjudged. The likelihood of the
accused in succeeding to establish his probable defence cannot
be a ground for his discharge.
In case of Amit Kapoor -Vrs.- Ramesh Chander
reported in (2012) 9 Supreme Court Cases 460, it is held as
follows:-
"19. At the initial stage of framing of a charge,
the Court is concerned not with proof but with a
strong suspicion that the accused has committed
an offence, which, if put to trial, could prove him
guilty. All that the Court has to see is that the
material on record and the facts would be
compatible with the innocence of the accused or
not. The final test of guilt is not to be applied at
that stage."
In case of State of Madhya Pradesh -Vrs.-
Mohanlal Soni reported in A.I.R. 2000 S.C. 2583, it is held
that at the stage of framing charge, the Court has to prima facie
consider whether there is sufficient ground for proceeding
against the accused. The Court is not required to appreciate the
evidence to conclude whether the materials produced are
sufficient or not for convicting the accused. If the evidence which
19
the prosecution proposes to produce to prove the guilt of the
accused, even if fully accepted before it is challenged by the
cross-examination or rebutted by the defence evidence, if any,
cannot show that accused committed the particular offence then
the charge can be quashed.
In case of A.R. Saravanan -Vrs.- State reported
in 2003 Criminal Law Journal 1140, it is held as follows:-
"7. Under section 239 of Cr.P.C., it is the duty of
the trial Court to look into whether there is
ground for presuming commission of offence or
whether the charge is groundless. The trial court
is required to see whether a prima facie case
pertaining to the commission of offence is made
out or not. At the stage of 239 of Cr.P.C., the
trial court has to examine the evidence only to
satisfy that prima facie case is made out or not.
The Magistrate has to consider the report of the
prosecution, documents of both sides, hear the
arguments of the accused and prosecution and
arrive at a conclusion that the materials placed,
on their face value would furnish a reasonable
basis or foundation for accusation.
8. The words "groundless" employed in Section
239 means there is no ground for presuming
that the accused is guilty. When there is no
ground for presuming that the accused has
20
committed an offence, the charge must be
considered as groundless."
Scope of producing materials by accused at the stage of
section 239 of Cr.P.C.
6. At the stage of framing of charge, in rare and
exceptional cases, if the accused produces materials before the
High Court which is based on sound, reasonable and indubitable
facts and cannot be justifiably refuted by the prosecution and
which are of sterling and impeccable quality or on the basis of
admitted documents which would rule out and displace the
assertions contained in the charges leveled against him, in order
to prevent abuse of process of the Court and to secure the ends
of justice, the High Court even at the stage of section 239 of
Cr.P.C. can take into account such materials. However, the High
Court at that stage should not enter into appreciation of evidence
to verify if the defence plea can be established by the accused or
not.
In case of State of Orissa -Vrs.- Debendra Nath
Padhi reported in (2005) 30 Orissa Criminal Reports (SC)
177, it is held as follows:-
"7. Similarly, in respect of warrant cases triable
by Magistrates, instituted on a police report,
Sections 239 and 240 of the Code are the
21
relevant statutory provisions. Section 239
requires the Magistrate, to consider 'the police
report and the documents sent with it under
Section 173 and, if necessary, examine the
accused and after giving accused an opportunity
of being heard, if the Magistrate considers the
charge against the accused to be groundless,
the accused is liable to be discharged by
recording reasons thereof.
8. What is to the meaning of the expression 'the
record of the case' as used in Section 227 of the
Code. Though the word 'case' is not defined in
the Code but Section 209 throws light on the
interpretation to be placed on the said word.
Section 209 which deals with the commitment of
case to Court of Session when offence is triable
exclusively by it, inter alia, provides that when it
appears to the Magistrate that the offence is
triable exclusively by the Court of Session, he
shall commit 'the case' to the Court of Session
and send to that Court 'the record of the case'
and the document and articles, if any, which are
to be produced in evidence and notify the Public
Prosecutor of the commitment of the case to the
Court of Session. It is evident that the record of
the case and documents submitted therewith as
postulated in Section 227 relate to the case and
the documents referred in Section 209. That is
the plain meaning of Section 227 read with
Section 209 of the Code. No provision in the
22
Code grants to the accused any right to file any
material or document at the stage of framing of
charge. That right is granted only at the stage of
the trial.
xx xx xx xx xx xx xx
16. All the decisions, when they hold that there
can only be limited evaluation of materials and
documents on record and sifting of evidence to
prima facie find out whether sufficient ground
exists or not for the purpose of proceeding
further with the trial, have so held with
reference to materials and documents produced
by the prosecution and not the accused. The
decisions proceed on the basis of settled legal
position that the material as produced by the
prosecution alone is to be considered and not
the one produced by the accused. The latter
aspect relating to the accused though has not
been specifically stated, yet it is implicit in the
decisions. It seems to have not been specifically
so stated as it was taken to be well settled
proposition. This aspect, however, has been
adverted to in State Anti-Corruption Bureau,
Hyderabad and Anr. -Vrs.- P.
Suryaprakasam : 1999 SCC (Crl.) 373 where
considering the scope of Sections 239 and 240
of the Code it was held that at the time of
framing of charge, what the trial Court is
required to, and can consider are only the police
23
report referred to under Section 173 of the Code
and the documents sent with it. The only right
the accused has at that stage is of being heard
and nothing beyond that (emphasis supplied).
The judgment of the High Court quashing the
proceedings by looking into the documents filed
by the accused in support of his claim that no
case was made out against him even before the
trial had commenced was reversed by this
Court. It may be noticed here that learned
counsel for the parties addressed the arguments
on the basis that the principles applicable would
be same - whether the case be under Sections
227 and 228 or under Sections 239 and 240 of
the Code.
xx xx xx xx xx xx xx
18......The scheme of the Code and object with
which Section 227 was incorporated and
Sections 207 and 207(A) omitted have already
been noticed. Further, at the stage of framing of
charge, roving and fishing inquiry is
impermissible. If the contention of the accused
is accepted, there would be a mini trial at the
stage of framing of charge. That would defeat
the object of the Code. It is well-settled that at
the stage of framing of charge the defence of
the accused cannot be put forth. The acceptance
of the contention of the learned counsel for the
accused would mean permitting the accused to
adduce his defence at the stage of framing of
24
charge and for examination thereof at that stage
which is against the criminal jurisprudence. By
way of illustration, it may be noted that the plea
of alibi taken by the accused may have to be
examined at the stage of framing of charge if
the contention of the accused is accepted
despite the well settled proposition that it is for
the accused to lead evidence at the trial to
sustain such a plea. The accused would be
entitled to produce materials and documents in
proof of such a plea at the stage of framing of
the charge, in case we accept the contention put
forth on behalf of the accused. That has never
been the intention of the law well settled for
over one hundred years now. It is in this light
that the provision about hearing the submissions
of the accused as postulated by section 227 is to
be understood. It only means hearing the
submissions of the accused on the record of the
case as filed by the prosecution and documents
submitted therewith and nothing more. The
expression 'hearing the submissions of the
accused' cannot mean opportunity to file
material to be granted to the accused and
thereby changing the settled law. At the state of
framing of charge hearing the submissions of the
accused has to be confined to the material
produced by the police.
xx xx xx xx xx xx xx
25
23. As a result of aforesaid discussion, in our
view, clearly the law is that at the time of
framing charge or taking cognizance the accused
has no right to produce any material. Satish
Mehra's case holding that the Trial Court has
powers to consider even materials which
accused may produce at the stage of section 227
of the Code has not been correctly decided."
In the case of Hem Chand -Vrs.- State of
Jharkhand reported in (2008) 40 Orissa Criminal Reports
(SC) 272, it is held as follows:-
"8. It is beyond any doubt or dispute that at the
stage of framing of charge, the Court will not
weigh the evidence. The stage for appreciating
the evidence for the purpose of arriving at a
conclusion as to whether the prosecution was
able to bring home the charge against the
accused or not would arise only after all the
evidences are brought on records at the trial.
9. It is one thing to say that on the basis of the
admitted documents, the appellant was in a
position to show that the charges could not have
been framed against him, but it is another thing
to say that for the said purpose he could rely
upon some documents whereupon the
prosecution would not rely upon.
xx xx xx xx xx xx xx
26
12. The learned counsel for the CBI is, thus
correct in his submission that what has been
refused to be looked into by the learned Special
Judge related the documents filed by the
appellant along with his application for
discharge.
The Court at the stage of framing charge
exercises a limited jurisdiction. It would only
have to see as to whether a prima facie case has
been made out. Whether a case of probable
conviction for commission of an offence has
been made out on the basis of the materials
found during investigation should be the concern
of the Court. It, at that stage, would not delve
deep into the matter for the purpose of
appreciation of evidence. It would ordinarily not
consider as to whether the accused would be
able to establish his defence, if any."
In the case of Rukmini Narvekar -Vrs.- Vijaya
Satarkekar and others reported in (2008) 41 Orissa
Criminal Reports (SC) 853, it is held as follows:-
"9. In my view, therefore, there is no scope for
the accused to produce any evidence in support
of the submissions made on his behalf at the
stage of framing of charge and only such
materials as are indicated in Section 227 Cr.P.C.
can be taken into consideration by the learned
Magistrate at that stage. However, in a
27
proceeding taken therefrom under Section 482
Cr.P.C., the Court is free to consider material
that may be produced on behalf of the accused
to arrive at a decision whether the charge as
framed could be maintained. This, in my view,
appears to be the intention of the legislature in
wording Sections 227 and 228 the way in which
they have been worded and as explained in
Debendra Nath Padhi case by the larger Bench
therein to which the very same question had
been referred.
xx xx xx xx xx xx xx
28(17)......Thus in our opinion, while it is true
that ordinarily defence material cannot be
looked into by the Court while framing of the
charge in view of D.N. Padhi's case, there may
be some very rare and exceptional cases where
some defence material when shown to the trial
Court would convincingly demonstrate that the
prosecution version is totally absurd or
preposterous, and in such very rare cases, the
defence material can be looked into by the Court
at the time of framing of the charges or taking
cognizance.
xx xx xx xx xx xx xx
29(18). In our opinion, therefore, it cannot be
said as an absolute proposition that under no
circumstances can the Court look into the
material produced by the defence at the time of
framing of the charges, though this should be
28
done in very rare cases i.e. where the defence
produces some material which convincingly
demonstrates that the whole prosecution case is
totally absurd or totally concocted. We agree
with Sri Lalit that in some very rare cases the
Court is justified in looking into the material
produced by the defence at the time of framing
of the charges, if such material convincingly
establishes that the whole prosecution version is
totally absurd, preposterous and concocted."
Execution of three agreements: Conduct of appellant no.2
7. The first agreement was executed on 04.02.2009 for
providing fifty acres of required land in Mouza- Jagannath
Prasad, Bhubaneswar. The condition was that the appellant no.2
would provide land @19.35 lakhs per acre including the cost of
land, cost of registration, conversion, mutation and payment of
revenue tax upto date of registration within the stipulated period
of 31.03.2009 to the individual committee members. The
appellant no.2 was given Rs.50,00,000/- (rupees fifty lakhs) as
advance for the said purpose but he failed to arrange the land
during the period of agreement.
The second agreement was executed on 31.07.2009
for providing fifty acres of required land in Mouza- Dhauli
Kausalyapur. The condition was that the appellant no.2 would
provide land @Rs.20.50 lakhs per acre including the cost of land,
29
cost of registration, conversion, mutation and payment of
revenue tax upto the date of registration within the stipulated
period of 30.09.2009 to the individual committee members. The
appellant no.2 managed to register around ten acres of land in
Mouza- Dhauli Kausalyapur in the name of the committee
members after receiving an amount of Rs.2.15 crores. The
appellant no.2 failed to arrange the balance land of forty acres
during the agreement period.
The third agreement was executed on 01.01.2010 for
providing fifty acres of required compact land in Mouza-
Giringaput and Bhagabatipur in Bhubaneswar. The condition was
that the appellant no.2 would provide land @ Rs.22.30 lakhs per
acre including the cost of land, cost of registration, conversion,
mutation and payment of revenue tax upto date of registration
within the stipulated period of 31.10.2010 to the individual
committee members. The ten acres of land in Mouza- Dauli
Kausalyapur which was registered the name of the committee
was returned to the appellant no.2.
It is the prosecution case that after execution of third
agreement, the appellant no.2 managed to acquire Ac.48.510
dec. of land in Mouza- Giringaput and Bhagabatipur in
Bhubaneswar but registered around 42.151 acres of land in the
name of the committee. He registered the balance land
30
measuring 6.359 acres in his own name with an illegal intention
and ulterior motive. The lands kept by the appellant no.2 were
connecting road to the house sites.
It is the further prosecution case that the appellant
no.2 received an amount of Rs.8.62 crores in addition to the
amount of Rs.2.65 crores which he had already received earlier
and thus the total amount received was Rs.11.27 crores. The
cost of the land registered in the name of the committee was
Rs.9.40 crores and thus the balance amount of Rs.1.87 cores
remained with the appellant no.2.
Filing of Civil Suit by appellant-company: Case of company
8. The first information report was lodged on
27.04.2014. It is not in dispute that two years prior to the
lodging of the first information report, the appellant-company
instituted a civil suit bearing C.S. No.502 of 2012 on 18.04.2012
against HAL Housing Committee in the Court of learned Civil
Judge, Senior Division, Bhubaneswar wherein the plaintiff prayed
for passing a decree of permanent injunction restraining the
defendant from entering into any agreement with any third party
with regard to the construction work over the suit property, with
a further prayer for a direction to the defendant to co-operate
with the plaintiff for supplying necessary finance for construction
work over the suit property and to execute fresh agreements to
31
that effect by supplying drawing, specification etc. of the work to
be done.
An application for ad-interim injunction vide I.A.
No.351 of 2012 under Order XXXIX Rules 1 & 2 read with section
151 of Code of Civil Procedure was also filed in the said Civil Suit
by the appellant-company with a prayer to restrain the HAL
Housing Committee from engaging any other
person/firm/company for executing the development and
construction of the housing project over the suit land and though
HAL Housing Committee has not filed the written statement in
the Civil Suit but show cause/objection has been filed to I.A.
No.351 of 2012.
In order to appreciate the nature of dispute between
the parties, the recitals of the third agreement which was
executed on 01.01.2010 are very relevant. This agreement
executed between the appellant-company and HAL Housing
Committee indicates that in order to have a housing complex at
Bhubaneswar, the HAL Housing Committee was searching for a
prospective builder and estate developer and constructor, who
can arrange and develop the land so also for construction of the
housing project and the appellant-company who was dealing
with sale/purchase of landed property and construction thereof
agreed for such arrangement, development of land and also
32
agreed to undertake the housing project over the site. The HAL
Housing Committee agreed upon the proposal made by the
appellant-company for establishing the house project at Mouza-
Giringaput and Bhagabatipur after visiting the proposal site and
being satisfied over the location of the area. As per the
agreement, it was the responsibility of the appellant-company for
arranging around fifty acres of land for the proposed housing
project. The appellant-company shall give the copy of legal
opinion obtained from a legal practitioner about the
title/ownership of each plot to the HAL Housing Committee
before the execution of sale deeds of the properties. The
appellant-company shall make the development of the proposed
housing site after registration of the properties in the name of
the HAL Housing Committee or its nominated persons which
includes leveling of the land, construction of metal and morum
road, construction of retraining walls of adequate size and shape
in the periphery of the proposed site, small demarcation stones
to be fixed all around the project site and two numbers of gates
with security cabins to be constructed at two entry places. In
case the HAL Housing Committee or its member desire to
provide the construction of individual compound walls to
individual units, the construction of those individual compound
walls must be given to the appellant-company. In case all the
33
members having individual sub-plots inside the projects provide
the individual walls of their respective units, the appellant-
company has to complete the common compound wall all around
the project by its own costs.
In the Civil Suit, specific averments have been taken
that the HAL Housing Committee fixed the deadline to
31.03.2012 for completion of all the allied works agreed to be
done by the appellant-company in respect of acquiring the land
but keeping itself away from doing the part of its contract i.e.
entrustment of development work of land, by executing
agreement for issuing work order and construction of houses
over the housing project site and on the day before presentation
of the suit, the defendant flatly denied to entrust the
development and construction work by executing a fresh
agreement and work order. It is further stated in the plaint that
the plaintiff had sustained huge loss in arranging the lands and
the appellant-company was expecting to get the allotment of
development and construction work as agreed upon and the
defendant had no right to stop construction work of the plaintiff
or to entrust the work of construction to any other person by
entering into any agreement with him.
Even though the defendant entered appearance in
the Civil Suit but no written statement was filed till the lodging of
34
the first information report. However, objection/show cause has
been filed by the HAL Housing Committee in the interim
application wherein it is stated that the shifting of project from
one place to another by executing three agreements from time
to time was only because of non-acquisition of land by the
plaintiff and violation of the terms of the contract and at no point
of time the plaintiff completed the acquisition of land as per the
terms of the agreement. It is further stated in the show cause
that by taking the entire amount towards costs of fifty acres of
land from the defendant, the plaintiff failed in executing the sale
deed within the agreement period and that the land acquired in
the name of the committee members is around 41.219 acres
whose cost @ 22.30 lakhs per acre is around Rs.9,19,183,70/-
and the plaintiff received Rs.11,32,000,00/- which is calculated
to be excess amount of Rs.2,12,816,36/- and therefore, the
plaintiff had illegally retained the money with him without
handing over the land area around 7.073 acre purchased in its
name by utilizing the excess amount received from the HAL
Housing Committee. It is further stated that the plaintiff has no
prima facie case in his favour and the balance of convenience
never leans in favour of the plaintiff, rather in favour of the
defendant.
35
Whether a civil dispute has been given a colour of criminal
offence
9. In case of Thelapalli Raghavaiah -Vrs.- Station
House Officer reported in (2007) 37 Orissa Criminal
Reports (SC) 358, it is held as follows:-
"17. Mr. Singhvi referred to and relied on a
decision of this Court in Madhavrao Jiwajirao
Scindia and Ors. -Vrs.- Sambhajirao
Chandrojirao Angre and Ors. reported in
1988 (1) SCC Page 692 , where this Court had
occasion to observe that though a case of breach
of trust may be both a civil wrong and a criminal
offence but there would be certain situations
where it would pre-dominantly be a civil wrong
and may or may not amount to a criminal
offence. It was also observed that when a
prosecution at the initial stage is asked to be
quashed, the test to be applied by the Court is
as to whether the uncontroverted allegations as
made prima facie established the offence.
18. We have carefully gone through the
complaint made by the petitioner, and are
convinced that the same primarily makes out a
civil dispute relating to measurement, though an
attempt has been made to give the same a
criminal flavour. The High Court rightly held that
the entire reading of the complaint does not
36
disclose any offence except a civil dispute
between the parties."
In case of Suneet Gupta -Vrs.- Anil Triloknath
Sharma reported in (2008) 40 Orissa Criminal Reports
(SC) 578, it is held as follows:-
"22. In the case on hand, the High Court was
right in coming to the conclusion that a civil
dispute - pure and simple - between the parties
was sought to be converted into a criminal
offence only by resorting to pressure tactics and
by taking police help which was indeed abuse of
process of law and has been rightly prevented
by the High Court."
It prima facie appears that the dispute between the
parties arose when HAL Housing Committee tried to enter into an
agreement with a third party with regard to the construction
work over the lands acquired by the appellant-company and
accordingly, the Civil Suit was filed on 18.04.2012 before the
learned Civil Judge (Senior Division), Bhubaneswar with a prayer
for a decree permanent injunction against the defendant so also
a decree for mandatory injunction. An interim application was
also filed in the Civil Suit for ad-interim injunction against the
defendant to restrain him from engaging any other
person/firm/company for executing the development and
construction of housing project over the suit land. Documents
37
were filed by the appellants by way of additional affidavit like the
agreement dated 01.01.2010, the plaint copy of the Civil Suit,
the copy of the interim application, copy of the objection/show
cause filed by the defendant and the order sheets of C.S. No.502
of 2012 which were taken on record without any objection from
the side of the respondents. These documents having not been
refuted by the prosecution can be looked into even at this stage
to ascertain the nature of dispute between the parties. Merely
because vital documents were not filed before the trial Court at
the time of hearing of the petition under section 239 of Cr.P.C.
and those were produced before the High Court by the accused
while challenging the rejection of the discharge petition, it would
be travesty of justice not to consider such documents only on the
ground of non-filing of the same before the trial Court. The
contention in that respect made by the learned Addl. Govt.
Advocate is not acceptable. In rare and exceptional cases, this
Court can entertain the materials produced by the accused in
such contingency provided that such materials are based on
sound, reasonable and indubitable facts and cannot be justifiably
refuted by the prosecution and those are of sterling and
impeccable quality. The said principle is also applicable for the
admitted documents. In order to prevent abuse of process of the
Court and to secure the ends of justice, this Court can take into
38
account such materials even at the stage of section 239 of
Cr.P.C.
After carefully going through the case records and
the undisputed documents filed by the appellants, I am
convinced that the dispute between the parties is primarily civil
in nature relating to delay in acquiring the lands, violation of
certain terms and conditions of agreement, attempt made by the
HAL Housing Committee to entrust the development and
construction of housing project over the suit land to the third
party.
Offence under section 420 of the Indian Penal Code
10. The essential ingredients of the offence of "cheating"
are as follows: (i) deception of a person either by making a false
or misleading representation or by dishonest concealment or by
any other act or omission; (ii) fraudulent or dishonest
inducement of that person to either deliver any property or to
consent to the retention thereof by any person or to intentionally
induce that person so deceived to do or omit to do anything
which he would not do or omit if he were not so deceived; and
(iii) such act or omission causing or is likely to cause damage or
harm to that person in body, mind, reputation or property. To
constitute an offence under section 420 of the Indian Penal
Code, there should not only be cheating, but as a consequence
39
of such cheating, the accused should have dishonestly induced
the person deceived (i) to deliver any property to any person, or
(ii) to make, alter or destroy wholly or in part a valuable security
(or anything signed or sealed and which is capable of being
converted into a valuable security). (Ref:- Md. Ibrahim -Vrs.-
State of Bihar reported in (2009) 8 Supreme Court Cases
751)
In case of Inder Mohan Goswami -Vrs.- State of
Uttaranchal reported in (2008) 39 Orissa Criminal Reports
(SC) 188, it is held that to hold a person guilty of 'cheating', it is
necessary to show that he had a fraudulent or dishonest
intention at the time of making the promise. From his mere
failure to subsequently keep a promise, one cannot presume that
he all along had a culpable intention to break the promise from
the beginning.
In case of Joseph Salvaraj A. -Vrs.- State of
Gujarat reported in (2011) 49 Orissa Criminal Reports
(SC) 924, it is held that under section 420 of the Indian Penal
Code, it is inbuilt that there has to be a dishonest intention from
the very beginning, which is sine qua non to hold the accused
guilty for commission of the said offence.
In case of Devendra -Vrs.- State of U.P. reported
in (2009) 43 Orissa Criminal Reports (SC) 680, it is held
40
that a misrepresentation from the very beginning is a sine qua
non for constitution of an offence of cheating, although in some
cases, an intention to cheat may develop at a later stage of
formation of the contract.
In case of Alpic Finance Ltd. -Vrs.- P. Sadasivan
reported in A.I.R. 2001 S.C. 1226, it is held as follows:-
"10. The facts in the present case have to be
appreciated in the light of the various decisions
of this Court. When somebody suffers injury to
his person, property or reputation, he may have
remedies both under civil and criminal law.
The injury alleged may form basis of civil
claim and may also constitute the ingredients of
some crime punishable under criminal law. When
there is dispute between the parties arising out
of a transaction involving passing of valuable
properties between them, the aggrieved person
may have right to sue for damages or
compensation and at the same time, law permits
the victim to proceed against the wrongdoer for
having committed an offence of criminal breach
of trust or cheating. Here the main offence
alleged by the appellant is that respondents
committed the offence under Section 420 I.P.C.
and the case of the appellant is that respondents
have cheated him and thereby dishonestly
induced him to deliver property. To deceive is to
induce a man to believe that a thing is true
41
which is false and which the person practicing
the deceit knows or believes to be false. It must
also be shown that there existed a fraudulent
and dishonest intention at the time of
commission of the offence. There is no allegation
that the respondents made any willful
misrepresentation. Even according to the
appellant, parties entered into a valid lease
agreement and the grievance of the appellant is
that the respondents failed to discharge their
contractual obligations. In the complaint, there
is no allegation that there was fraud or dishonest
inducement on the part of the respondents and
thereby the respondents parted with the
property. It is trite law and common sense that
an honest man entering into a contract is
deemed to represent that he has the present
intention of carrying it out but if, having
accepted the pecuniary advantage involved in
the transaction, he fails to pay his debt, he does
not necessarily evade the debt by deception.
11. Moreover, the appellant has no case that the
respondents obtained the article by any
fraudulent inducement or by willful
misrepresentation. We are told that
respondents, though committed default in
paying some installments, have paid substantial
amount towards the consideration.
42
12. Having regard to the facts and
circumstances, it is difficult to discern an
element of deception in the whole transaction,
whereas it is palpably evident that the appellant
had an oblique motive of causing harassment to
the respondents by seizing the entire articles
through magisterial proceedings. We are of the
view that the learned judge was perfectly
justified in quashing the proceedings and we are
disinclined to interfere in such matters."
In case of Hridaya Ranjan Pd. Verma -Vrs.- State
of Bihar reported in A.I.R. 2000 S.C. 2341, it is held as
follows:-
"13. Cheating is defined in Section 415 of the
Code as, "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".
Explanation - A dishonest concealment of facts is
a deception within the meaning of this section.
The section requires - (1) Deception of any
person.
43
(2) (a) Fraudulently or dishonestly inducing that
person
(i) to deliver any property to any person; or
(ii) to consent that any person shall retain any
property; or
(b) intentionally inducing that person 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.
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 to inducement which may
be judged by his subsequent conduct but for this
44
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.
16. 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."
It is the prosecution case that after the execution of
the third agreement on 01.01.2010 for providing fifty acres of
required compact land in Mouza-Giringaput and Bhagabatipur in
Bhubaneswar, the appellant no.2 managed to acquire Ac.48.510
dec. of land in Mouza-Giringaput and Bhagabatipur but registered
around Ac.42.151 dec. of land in the name of the committee and
he registered the balance land measuring Ac.6.359 dec. in his
own name and the lands kept by the appellant no.2 were
connecting road to the house sites. Even when the second
agreement was executed on 31.07.2009 for providing fifty acres
of required land in Mouza- Dhauli Kausalyapur, the appellant
45
no.2 managed to register around ten acres of land in Mouza-
Dhauli Kausalyapur in the name of the committee members
which were returned to the appellant no.2 after execution of third
agreement. Thus after executing agreement and taking money
for providing land, the appellant no.2 has not sat idle rather
made sincere attempt to locate the lands at the assured places at
Bhubaneswar and was successful to a large extent and also got it
registered in the name of the HAL Housing Committee. What was
the genuine grievance of the appellants for which the appellant
no.2 retained and registered Ac.6.359 dec. in the name of the
company and did not register the same in the name of the
committee is a factor which is the subject matter of the Civil
Suit.
In view of the foregoing discussions, I am of the
humble view that there is absence of any prima facie material to
show that representation which was made to the committee by
the appellant no.2 was false to his knowledge and it was made in
order to deceive the committee. There is also nothing on record
to show that the intention of the appellant no.2 was dishonest at
the very time when he made the promise and entered into a
transaction with the committee to part with money. Therefore,
on the basis of the available materials, it cannot be said that
there existed any fraudulent and dishonest intention at the time
46
of execution of agreement or the appellant no.2 made any willful
misrepresentation. Even if it is the prosecution case that the
appellant no.2 failed to discharge the contractual obligations to
some extent but 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.
Without fraudulent inducement or willful misrepresentation, mere
failure to keep up the promise subsequently cannot be a ground
to attract the ingredients of the offence of cheating.
Therefore, I am of the humble view that in the
factual scenario, the ingredients of offence under section 420 of
the Indian Penal Code are not attracted.
Offence under section 406 of the Indian Penal Code
11. Section 406 of the Indian Penal Code prescribes
punishment for criminal breach of trust which is defined under
section 405 of the Indian Penal Code. A careful reading of the
section 405 Indian Penal Code shows that a criminal breach of
trust involves the following ingredients:
(a) a person should have been entrusted with
property, or entrusted with dominion over property;
(b) that person should dishonestly misappropriate or
convert to his own use that property, or dishonestly
47
use or dispose of that property or wilfully suffer any
other person to do so;
(c) that such misappropriation, conversion, use or
disposal should be in violation of any direction of law
prescribing the mode in which such trust is to be
discharged, or of any legal contract which the person
has made, touching the discharge of such trust.
The gist of the offence under section 405 of the
Indian Penal Code is misappropriation done in a dishonest
manner. There are two distinct parts of the said offence. The first
involves the fact of entrustment, wherein an obligation arises in
relation to the property over which dominion or control is
acquired. The second part deals with misappropriation which
should be contrary to the terms of the obligation which is
created. 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 informant does not amount to criminal breach of trust.
It is the case of the informant as per the first
information report that an excess amount of Rs.2.84 crores (an
amount of Rs.1.87 crores for the land, Rs.55 lakhs as advance
48
for development of site and Rs.42 lakhs for registration and
conversion charges) has been retained by the appellant no.2 and
therefore, he has misappropriated such amount. Much prior to
the lodging of the F.I.R., the appellant has approached the
learned Civil Judge, Senior Division, Bhubaneswar in C.S. No.502
of 2012 and also filed an interim application against HAL Housing
Committee praying for certain reliefs as already stated. Whether
the terms and conditions of the agreement between the parties
have been flouted, whether the appellants would be entitled to
the reliefs sought for in the Civil Suit and interim application and
whether there is any excess payment of money to the appellant
no.2 can be better adjudicated by the Civil Court by giving due
opportunity of hearing to the respective sides. In the background
of civil dispute between the parties, mere fact that the appellant
no.2 did not refund the excess money which he allegedly
received from the informant, does not amount to criminal breach
of trust.
Therefore, I am of the humble view that in the
factual scenario, the ingredients of offence under section 406 of
the Indian Penal Code are not attracted.
Offences under sections 467 and 468 of the Indian Penal
Code
49
12. The basic ingredients of the offence under section
467 of the Indian Penal Code are that (i) the document in
question is forged; (ii) the accused forged it and (iii) the
document is one of the kinds enumerated in the said section.
Section 468 of the Indian Penal Code applies to those cases
where forgery has been committed for the purpose of cheating.
If it is proved that the purpose of the offender in committing the
'forgery' is to obtain property dishonestly or if the guilty purpose
comes within the definition of 'cheating' as defined under section
415 of the Indian Penal Code then his act would be punishable
under section 468 of the Indian Penal Code. For both these
offences, the very first thing which is required to be proved is
that a 'forgery' as defined under sections 463 and 464 of the
Indian Penal Code have been committed.
It is contended that by the learned counsel for the
State that since out of the lands registered in the name of the
Committee by the appellants, 14 acres fell under the category of
'Chhota Jungle' which are inalienable and no permission was
obtained from the Collector as required under 1948 Act,
therefore, fraud has been perpetuated and so-called alienation is
a mere eye wash being contrary to law. The decisions placed by
the learned counsel for the State indicate that section 3 of 1948
Act contains a non-obstante clause, which prohibits alienation of
50
communal forest and private lands and further prohibits a
landlord from selling, mortgaging, leasing or otherwise assigning
or alienating or converting into raiyati land any communal forest
or private land or creating any occupancy rights therein, without
the previous sanction of the Collector which of course would not
be applicable in prohibiting a landlord from leasing out his
private land for a period not exceeding two years and section 4
provides transaction of the nature specified in section 3 to be
void.
In the case in hand, more than three years prior to
the lodging of the first information report, HAL Housing
Committee approached this Court on 11.01.2011 in W.P.(C) No.
834 of 2011 with a prayer to direct the Tahasildar, Bhubaneswar
to change the Kissam of Plot No.5 under Khata No.176 of Mouza-
Giringaput which was mentioned as 'Chhota Jungle' in the 1962
settlement R.O.R. and this Court as per order dated 13.12.2011
while disposing of the writ petition, directed the petitioner to
approach the appropriate authority under section 58 of the
Odisha Land Reforms Act, 1960. The averments made in the writ
petition filed by the HAL Housing Committee clearly indicate that
being aware of the fact in the R.O.R., the Kissam of the land was
mentioned as 'Chhota Jungle', they purchased the land and
approached different authorities since 2010 including this Court
51
twice i.e. W.P.(C) No.16482 of 2010 and W.P.(C) No. 834 of
2011 for conversion of the status of the land, as the same
Kissam as per 1962 settlement ROR was not in existence in the
field and since the Government had decided to give the facility to
the land owner for changing the Kissam and thereby raising the
land revenue. Therefore, the transfer of land recorded under the
Kissam 'Chhota jungle' was within the knowledge of both the
parties and the requisite mens rea of forgery is hopelessly found
to be absent and it cannot be said any fraud has been
perpetuated in the alienation or that the execution of the sale
deed comes within 'making a false document' as defined under
section 464 of the Indian Penal Code.
Therefore, I am of the humble view that in the
factual scenario, the ingredients of offence under sections 467
and 468 of the Indian Penal Code are not attracted.
Offence under section 120-B of the Indian Penal Code
13. Section 120-B of the Indian Penal Code prescribes
punishment for criminal conspiracy which is defined under
section 120-A of the Indian Penal Code.
In case of Devender Pal Singh -Vrs.- State
National Capital Territory of Delhi reported in (2002) 5
Supreme Court Cases 234, it is held that the element of a
criminal conspiracy consists of (a) an object to be accomplished,
52
(b) a plan or scheme embodying means to accomplish that
object, (c) an agreement or understanding between two or more
of the accused persons whereby they become definitely
committed to co-operate for the accomplishment of the object by
the means embodied in the agreement, or by any effectual
means, (d) in the jurisdiction where the statute required an overt
act. The essence of a criminal conspiracy is the unlawful
combination and ordinarily the offence is complete when the
combination is framed. From this, it necessarily follows that
unless the statute so requires, no overt act need be done in
furtherance of the conspiracy, and that the object of the
combination need not be accomplished, in order to constitute an
indictable offence. Law making conspiracy a crime is designed to
curb immoderate power to do mischief which is gained by a
combination of the means. The encouragement and support
which co-conspirators give to one another rendering enterprise
possible which, if left to individual effort, would have been
impossible, furnish the ground for visiting conspirators and
abettors with condign punishment. The conspiracy is held to be
continued and renewed as to all its members wherever and
whenever any member of the conspiracy acts in furtherance of
the common design. For an offence punishable under section
120-B of the Indian Penal Code, the prosecution need not
53
necessarily prove that the perpetrators expressly agree to do or
cause to be done illegal act; the agreement may be proved by
necessary implication. Offence of criminal conspiracy has its
foundation in an agreement to commit an offence. A conspiracy
consists not merely in the intention of two or more, but in the
agreement of two or more to do an unlawful act by unlawful
means.
There is no iota of material in the chargesheet to
indicate that there was any criminal conspiracy between the
appellants for doing an unlawful act by unlawful means rather
the appellant no.2 on behalf of the company lawfully entered into
a contract with the HAL Housing Committee and did his best in
acquiring the lands and registering the lands in the name of the
company in a lawful manner and as such the ingredients of
offence under section 120-B of the Indian Penal Code are not
attracted.
Offence under section 6 of the OPID Act
14. Section 6 of the OPID Act deals with punishment for
default in repayment of deposits and interests honouring the
commitment. In order to attract the ingredients of the offence,
the following aspects are to be proved:-
(i) Default in returning the deposit by any
Financial Establishment; or
54
(ii) Default in payment of interest on the deposit
or failure to return in any kind by any Financial
Establishment; or
(iii) Failure to render service by any Financial
Establishment for which the deposits have been
made.
In the event any of the aforesaid aspects is proved,
every person responsible for the management of the affairs of
the Financial Establishment shall be held guilty. 'Financial
Establishment' has been defined under section 2(d) of the OPID
Act and 'deposit' has been defined under section 2(b) of the
OPID Act. The word 'default' in section 6 of the OPID Act has
been used in conjunction with honouring the commitment and
therefore, it depends upon the reciprocal promises. The material
available on record indicate that after several round of
discussions and execution of successive agreements, the job of
arranging a sizable extent of land at Bhubaneswar was entrusted
to the company by the HAL Housing Committee. It was a
herculean task and in spite of that, it appears that the company
did his best in arranging a major extent of land. Dispute arose
when the hope of the company to proceed with the housing
project on the acquired land as a part of composite agreement
was shattered by the conduct of the committee in making
55
attempt to hand over the housing project to a 3rd party.
Therefore, it is difficult to fathom that any commitment made by
the company was flouted deliberately or that the company
committed any default or failed to render any service for which
the deposit was accepted.
Therefore, the ingredients of the offence under
section 6 of the OPID Act are grossly lacking.
Scope of interference in exercise of Appellate Jurisdiction
15. There is no dispute that this appeal has been filed
under section 13 of the OPID Act as the appellants are aggrieved
by the order of the Designated Court in rejecting the petition
under section 239 of Cr.P.C. for discharge and consequently
framing charges.
In case of Popular Muthiah -Vrs.- State of Tamil
Nadu reported in (2006) 34 Orissa Criminal Reports (SC)
749, it is held that the High Court while exercising its revisional
or appellate power, may exercise its inherent powers, both in
relation to substantive as also procedural matters. In respect of
the incidental or supplemental power, evidently the High Court
can exercise its inherent jurisdiction irrespective of the nature of
the proceedings. It is not trammeled by procedural restrictions
and the power can be exercised suo motu in the interest of
56
justice. If such a power is not conceded, it may even lead to
injustice to an accused.
It seems that the Investigating Officer has not
correctly assessed the nature of dispute between the parties and
in a mechanical manner filed the charge sheet. The truth has
been kept behind the curtain deliberately and therefore, there is
malafideness and arbitrariness in the action of the investigating
agency to harass the appellants.
In case of State of Bihar and Anr. -Vrs.- P.P.
Sharma reported in A.I.R. 1991 S.C. 1260, it is held as
follows:-
"47. The investigating officer is the arm of the
law and plays pivotal role in the dispensation of
criminal justice and maintenance of law and
order. The police investigation is, therefore, the
foundation stone on which the whole edifice of
criminal trial rests an error in its chain of
investigation may result in miscarriage of justice
and the prosecution entails with acquittal. The
duty of the investigating officer, therefore, is to
ascertain facts, to extract truth from half-truth
or garbled version, connecting the chain of
events. Investigation is a tardy and tedious
process. Enough power, therefore, has been
given to the police officer in the area of
investigatory process, granting him or her great
57
latitude to exercise his discretionary power to
make a successful investigation. It is by his
action that law becomes an actual positive force.
Often crimes are committed in secrecy with
dexterity and at high places. The investigating
officer may have to obtain information from
sources disclosed or undisclosed and there is no
set procedure to conduct investigation to
connect every step in the chain of prosecution
case by collecting the evidence except to the
extent expressly prohibited by the Code or the
Evidence Act or the Constitution. In view of the
arduous task involved in the investigation he has
been given free liberty to collect the necessary
evidence in any manner he feels expedient, on
the facts and in given circumstances. His/her
primary focus is on the solution of the crime by
intensive investigation. It is his duty to ferret
out the truth. Laborious hardwork and attention
to the details, ability to sort out through
mountainous information, recognized
behavioural patterns and above all, to
coordinate the efforts of different people
associated with various elements of the crime
and the case are essential. Diverse methods are,
therefore, involved in making a successful
completion of the investigation."
58
In case of Jamuna Chaudhary -Vrs.- State of
Bihar reported in 1974 Criminal Law Journal 890, it is held
by the Hon'ble Supreme Court as follows:
"11. The duty of the Investigating Officers is not
merely to bolster up a prosecution case with
such evidence as may enable the court to record
a conviction but to bring out the real
unvarnished truth."
16. In view of the foregoing discussions, I am of the
considered opinion that the Investigating Officer has failed to
collect any clinching materials to proceed against the appellants
and acted in a most casual and superficial manner. On the
available materials on record, I find no prima facie case for
commission of the offences alleged against the appellants. There
is no ground for presuming that the appellants have committed
the offences alleged. There is no strong suspicion against the
appellants. The dispute between the parties is primarily civil in
nature which has been given the colour of a criminal case
resulting abuse of process. Submission of charge sheet is based
totally on unfounded assumptions and it has resulted in causing
miscarriage of justice. Therefore, I am of the humble view that
the learned trial Court has committed palpable error in
dismissing the petition for discharge and in framing charges
59
against the appellants and as such, in the interest of justice, the
impugned order cannot be sustained in the eye of law.
17. Accordingly, the CRLA is allowed. The impugned
order dated 23.11.2015 passed by the learned Presiding Officer,
Designated Court in rejecting the petition under section 239 of
Cr.P.C. for discharge and consequently framing charges under
sections 420, 406, 467, 468 read with section 120-B of the
Indian Penal Code and section 6 of the OPID Act, are hereby set
aside. The criminal proceeding against the appellants in C.T.
Case No. 07 of 2014 pending before the learned Presiding
Officer, Designated Court stands quashed.
.................................
S. K. Sahoo, J.
Orissa High Court, Cuttack The 27th August, 2018/Pravakar/Sisir/Sukanta