Andhra HC (Pre-Telangana)
Ahmed Moosa And Others vs Inspector Of Police, Jagtial And Others on 27 August, 1999
Equivalent citations: 1999(5)ALD753, 1999(2)ALD(CRI)610, 1999(2)ALT(CRI)377, 2000CRILJ660
Author: Vaman Rao
Bench: Vaman Rao
ORDER
1. This petition under Section 482 of Cr.PC has been filed for quashing the First Information Report and proceedings in Cr. No. 44 of 1999 of Jagitial Town P.S. lodged in the Court of the Judicial First Class Magistrate, Jagitial.
2. The relevant facts may be stated briefly as follows:
The de facto complainant - respondent No.3 herein, which is a firm by name Vishnu Sai Finance, advanced a loan of Rs.2 lakhs to petitioner No.1-Ahmed Moosa, another sum of Rs.2,50,000/- to petitioner No2-Mohd. Baquar Hussain and another sum of Rs. 2,50,000/- to petitioner No.3 Mohd Zakir Hussain on 29-1-1996 from their Finance Company. By way of security for this loan, the petitioners herein had mortgaged their land in Survey Nos.803 to the extent of 63 guntas situated at Shivar Boonakkal of Karimnagar Town under a registered mortgage deed and agreed to pay the loan amount within two years. Inspite of lapse of three years as on the date of complaint, namely, 20-2-1999, the petitioners have not made any repayment and avoided payment on one pretext or other. Petitioner No.2 shifted to Hyderabad and the partners of the de facto complainant had to make repeated tours to Hyderabad to collect the amount. Subsequently, the mortgaged land was sold away by the petitioners in favour of one Penti Laxmi Narayana, Yelgandla Satya Narayana and Swargam Mallesham on 14-10-1998. On seeing a paper publication in respect of this sale transaction, the partners of the Finance Company went to petitioner No.1. The petitioners told that they disposed of the land for payment of their loan and promised to pay back the amount due to them. They told that they will pay the amount to them and get the mortgage released and thereafter will execute a registered sale deed in favour of the intending purchasers. But the petitioners did not pay any amount to them even after the sale of the said land, even though they have obtained Rs.3,75,000-00 from the purchasers. It was, therefore, requested to see that the repayment of the loan was affected with interest. On this complaint First Information Report was issued for an offence under Section 420 IPC by the concerned police. It is this FIR and further proceedings in pursuance of the FIR which are sought to be quashed.
3. It is stated that the respondents are seeking to recover the loan amount by illegally taking the help of the police, who under threat are seeking to recover the amount payable to the respondent No. 3. It is stated that similar tactics were adopted by the respondent No. 3 for recovering the loan amount from the petitioners 2 and 3 by sending the police personnel to their houses and by threatening them and calling them to the police station Jagitial Town. The petitioner No.1 in the above circumstances filed WP No.3679 of 1999 against the respondents 1 to 3 for a direction not to interfere with the liberties of the petitioners, otherwise than in due course of law. This writ petition came up for hearing on 22-2-1999 and the Government Pleader took time and thereafter it was not listed. After filing of this writ petition the police Jagitial registered the said FIR in Cr. No. 44 of 1999 for an offence under Section 420 IPC.
4. The learned Counsel for the petitioners contends that the allegations in the FIR do not constitute an offence under Section 420 IPC, inasmuch as there is no allegation of mis-representation resulting in delivery of any property as seen from the contents of complaint given by the respondents. The learned Counsel for the petitioners further contends that it is merely a case of non-payment of debt which at best can be a subject of civil proceeding.
5. On the other hand, the learned Counsel for the respondents contends that simply because the matter constitute a loan transaction, this in itself does not rule out the commission of a criminal offence under Section 420 IPC.
6. The learned Counsel for the petitioners relying on the judgment of State of Haryana v. Bhajan Lal and others, 1992 Crl.LJ 527 contends that the facts in this case squarely fall within the guidelines enunciated by the Supreme Court. In the said case guidelines have been laid down for ascertaining whether the grounds exist for exercising powers under Section 482 Cr.PC, one of the guidelines reads as follows:
"Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused."
7. The question for consideration is whether any cognizable offence is made out from the contents of the complaint given to the police by the respondent No. 3 herein. The following may be stated as the Central facts in the complaint.
(1) That the complaint firm advanced loan of Rs. 2,00,000-00/ on 29-1-1996 to petitioner No. 1 and Rs. 2,50,000 each to the petitioners 2 and 3 as and as security for the loan the petitioners had mortgaged their land in S. No.803 to the extent of 0-63 guntas.
(2) Under the mortgage agreement the petitioners agreed to repay the loan within two years.
(3) Even after three years lapsed the petitioners did not make any payment, (4) That the petitioners entered into a sale transaction in respect of the land mortgaged to the complainant on 14-10-1998.
(5) The Advocate for the purchasers got issued a public notice disclosing their intention to purchase the said land.
(6) The petitioners, when approached, promised to pay the loan amount and to get the mortgaged deed released before executing the sale deed in favour of intending purchasers.
(7) Subsequently, the complainant came to know that the petitioners had received a sum of Rs. 3,75,000/- from the purchasers of that land but did not pay anything to him.
8. The case for an offence under Section 420 IPC has been registered on the basis of mainly the above allegations. The ingredients of offence under Section 420 IPC are that a person deceived some one to deliver a valuable security or property that the person so deceived was induced to do so, that such person acted on such inducement in consequence of his having been received by the accused and that the accused acted fradulently or dishonestly when so inducing that person.
9. A person can be said to have done a thing dishonestly if he does so with the intention of causing wrongful gain to one person or wrongful loss to another person.
Wrongful loss is the loss by unlawful means of property to which a person is entitled while wrongful gain to a person means a gain to him by unlawful means of property to which the person gaining is not legally entitled. It is true that a complaint given to the police need not reproduce the ingredients of the offence under Section 420 verbatum from the section. It is also true that the complaint need riot contain all the minor details relating to the transaction which may constitute cheating. But before the First Information Report is registered the requirement of law under Section 154 Cr.PC is that the contents of the complaint must prima facie disclose the commission of a cognizable offence.
10. In this case the property said to have been delivered by the complaint to the accused is said to be the amounts advanced as loan to the three petitioners. Apparently, these amounts were delivered to the petitioners as loan on their request and on their offering registered mortgage deed in respect of immovable property as security as a part of business of the complainant as Finance company. There is no hint or even a remote suggestion that the complainant was induced to deliver these amounts as loan on account of any deception, any fradulent or dishonest inducement practised by the petitioners. From the tenor of the complaint it would appear that it was perfectly a normal loan transaction in which the complainant had advanced loan, to the petitioners by taking the precaution of a registered mortgage deed as security for the loan. There is no allegation that the petitioners made any fradulent representation as to their title to mortgaged property without having such title to the same. The complaint discloses that according to the terms of the loan agreement and mortgage deed the loan was to be repaid within two years, but it was not repaid inspite of lapse of three years. Mere failure to repay the loan within the period agreed upon cannot be construed as a piece of evidence of practising fradulent deception on the part of the accused.
11. The only other allegation is that the petitioners herein set out to sell the mortgaged property in favour of third persons. Even in this regard the complaint specifically mentions that when approached the petitioners told that they will sell the mortgaged property and repay his loan amount. The fact that the petitioners received a sum of Rs. 3,75,000-00, even if true, as stated in the complaint does not constitute offence of cheating by fradulent deception. Firstly, this is an event which occurred three years after the complainant has delivered the money to the petitioners as loan. This does not lead to an inference that the accused had intention to cheat and practice any fradulent deception on the complainant at the time of loan transaction. Even if the allegation in the complaint that the petitioners obtained Rs.3,75,000-00 towards sale consideration of the land mortgaged in favour of the complainant, and that they did not pay any amount out of the sale consideration towards satisfying the debt owed by them to the complainant is taken to be true, this in itself does not amount to cheating. Even assuming, as stated in the complaint, that when the complainant met the accused they told him that they will pay the amount owed by them after receipt of the sale consideration for the sale of mortgaged property is true, this does not satisfy the accused of cheating as defined under Section 415 IPC. It is pertinent to mention here that the complainant has not delivered any property in pursuance of such a representation that they will repay the amount after the sale transaction. At the worst the act of the accused in entering into a transaction of sale in respect of the mortgage property would show that the accused had diluated the security obtained by the complainant while advancing the loan. Strictly speaking even this does not affect the security obtained by the complainant in any way, inasmuch as any sale of mortgaged property will be subject to the liability of the property under the earlier mortgage. Considering these aspects of the matter, I am constrained to held that in this case the complaint ex-facie does not disclose an offence under Section 420 IPC or any cognizable offence against the petitioners.
12. In fact a careful reading of the complaint on which First Information Report was recorded would show that it was not intended to be a complaint for taking criminal action against the accused. The prayer portion of the complaint, which is extracted, is significant.
"Therefore, we request you to kindly see that the payment of loan along with interest and expenses is made by them to me."
Avowedly, the complainant approached the police for helping him to recover the amount due to him and not for taking any criminal action against the accused. From the above it would appear that it is purely a case of default of debtor in repaying the loan amount to the creditor under a registered mortgage deed. It is true that an offence under Section 420 of IPC may be committed even during transactions in the nature of contracts, but this apparently is not one such case. It may be pertinent to mention here that the complainant has his civil remedies for recovering the loan amount intact. Every default in repayment of the loan to the creditor cannot be equated with cheating on the part of the defaulter. Similarly, every act which has the effect of jeopardising the security offered by the debtor to the creditor will in the absence of anything else cannot be considered as an act of cheating. Considering the totality of the circumstances, this appears to be one of those rare cases in which this Court can exercise its inherent powers under Section 482 of Cr.PC for quashing the proceedings, inasmuch as even if the facts as stated in the complaint, which contains all the details, are accepted as true, no offence under Section 420 of IPC is made out.
13. In the result, this petition is allowed and the proceedings arising out of First Information Report in Crime No. 44 of 1999 of Jagitial Town Police Station pending before the Judicial First Class Magistrate, Jagitial stand quashed.