Munni Devi & Ors vs State Of Jharkhand & Anr on 15 May, 2012

[Cites 10, Cited by 1]

Jharkhand High Court

Munni Devi & Ors vs State Of Jharkhand & Anr on 15 May, 2012

This application has been filed for quashing of the First Information Report of Sidgora P.S. Case No. 207 of 2010 (G.R. No. 3332 of 2010) instituted under Sections 406, 420 and 120B of Indian Penal Code.

The facts giving rise to filing of the F.I.R. are that the complainant-opposite party no. 2 having constructed a commercial building in the name of 'Bifiya Complex' sold 1800 Sq. F. each of the ground floor, first floor and second floor of the aforesaid complex to petitioner no. 1 at the cost of Rs. 90 lakhs, whereas 1870 Sq. F. each of the first floor and second floor of the building was sold to petitioner no. 2 at the cost of Rs. 50 lakhs and both of them paid those amounts. Further shops situated at the basement measuring 497 Sq. F. and 280 Sq. F. as also constructed portion measuring 447 Sq. F. of the ground floor was sold to petitioner no. 3 for a consideration of Rs. 36,53,149/- as against that only a sum of Rs. 13,80,000/- was paid in advance.

Further case of the complainant is that the accused persons had asked the complainant to do certain extra works on the promise that they are ready to bear the cost of it. Accordingly, the work worth Rs. 1,97,70,271/-, which the accused persons wanted to do, was done but as against that they paid only a sum of Rs. 1,67,50,800/- and as such a sum of Rs. 30,19,471/- remained to be paid.

It has further been alleged that the complainant as per wishes of the accused persons sold 3670 Sq. F. of the constructed portion and 2000 Sq. F. of the basement to them for a sum of Rs. 1,09,25,000/- on promise being made that the payment would be made as soon as the bank advances loan to them and they start running nursing home in the building. In fact, they started running nursing home in the building but did not pay the amount which was due to be paid to the complainant and ultimately, refused to make payment to the complainant.

On such allegation, case was registered as Sidgora P.S. Case No. 207 of 2010 under Sections 406, 420 and 120B of Indian Penal Code against the petitioners. The very first F.I.R. is under challenge.

Mr. V. Shivnath, learned senior counsel appearing for the petitioners, submits that even if the entire allegations are taken to be true, no offence is made out against the petitioners as they had never been alleged to have induced the complainant fraudulently and dishonestly to sell the building of the complex nor from the allegation made in the complaint, it can be inferred that the petitioners had had fraudulent or dishonest intention at the time of making promise or representation. In that event, failure to keep promise would not entail the petitioners with criminal liability particularly when it is the case of the complainant that the entire price as had been agreed had allegedly been not paid to the complainant and thereby it becomes a pure case of civil liability and not a case of criminal liability.

Learned counsel in this respect has referred to a decision rendered in a case of Harmanpreet Singh Ahluwalia and others Vs. State of Punjab and others {(2009) 7 SCC 712}. By placing reliance on the said decision, it was submitted that the instant F.I.R. is fit to be quashed.

As against this, Mr. Indrajit Sinha, learned counsel appearing for the opposite party no. 2, submits that on the face of allegation one may form opinion that the case is of civil liability but in fact if the allegations are taken into account in its entirety, it would appear that there was misrepresentation of the fact as they had promised that they would be making payment of the due amount after having loan from the bank and when the nursing home starts functioning. On the said promise they took possession of the building but did not make any payment and thereby F.I.R. never warrants to be quashed in view of the decision rendered in a case of Indian Oil Corporation vs. NEPC India Limited and others [(2006) 6 SCC 736].

Learned counsel further submits that in course of investigation, it has transpired that in order to put counter claim, certain documents were produced by the petitioners which were found to be forged and as such, the court should not exercise inherent power for quashing of the F.I.R. even if it comes to the conclusion that the allegation made in the F.I.R. does not constitute any offence. Learned counsel in this regard has referred to a decision rendered in a case of State of Maharashtra Vs. Sayed Mohammed Masood and another {(2009) 8 SCC 787.

In the context of the submission advanced on behalf of the parties, one needs to take notice of law laid down by the Hon'ble Supreme Court in regard to exercise of jurisdiction by the High Court for quashing of an F.I.R.. In this regard, I may straightaway refer to a decision laid down in a case of R. Kalyani Vs. Janak C. Mehta {2009) 1 SCC 516, wherein the following propositions have been laid down :-

"15. Propositions of law which emerge from the said decisions are:

(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence.

(2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.

(3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.

(4) If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue."

Again, in a case of Mahesh Chaudhary Vs. State of Rajasthan {(2009) 4 SCC 439}, the Hon'ble Supreme Court reiterated the principle that in the event the allegations contained in the F.I.R. or the complaint petition even if on face value are taken to be correct in their entirety, does not disclose commission of an offence, the court can exercise jurisdiction as enshrined under Section 482 Cr.P.C.

Thus, bearing the principle laid down by the Hon'ble Supreme Court in mind, it needs to be considered as to whether the allegation made in the complaint does constitute offence of cheating or criminal breach of trust.

The offence of cheating has been defined under Section 415 of the Indian Penal Code which reads as follows:

"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 persons 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".

From its reading it appears that following ingredients should necessarily be there for constituting offence of cheating.

(1) there should be fraudulent or dishonest inducement of a person by deceiving him (2) (a) the person so deceived should be induced to deliver any property to any persons, or to consent that any person shall retain any property or

(b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived.

(3) in cases covered by 2(b) the Act or omission should be one which causes or is likely to cause damage or harm to the person induced in bodily or reputation or property.

Thus, the first element necessary for constituting the offence of cheating is a deception of the complainant by the accused. Unless there is deception, the offence of cheating never gets attracted. After deception has been practiced the persons deceived should get induced to do or omit to do something.

In the instant case, there does not appear to be any allegation nor any inference could be drawn from the allegation that the accused persons ever induced the complainant fraudulently or dishonestly to sell the property in question.

It has been well settled principle of law that the complainant is required to show that the accused persons had fraudulent and dishonest intention at the time of making promise or representation to cheat the complainant. However, such a culpable intention right from the beginning i.e. at the time when the promise was made cannot be presumed when one fails to keep promise subsequently.

In this regard, I may refer to a case of Hira Lal Hari Lal Bhagwati Vs. C.B.I. {(2003) 5 SCC 257}. Again in a case of Vir Prakash Sharma Vs. Anil Kumar Agarwal {(2007) 7 SCC 373}, it has been held that non-payment or under payment of the price of the goods by itself does not amount to commission of offence of cheating or criminal breach of trust.

So far the submission advanced on behalf of the opposite party no. 2 to the effect that the accused persons played deception as they by making promise that the payment would be made after the loan is advanced and the nursing home starts working took possession but did not make payment, is concerned, it be recorded that it was simple promise which was breached. But it never assumes characteristics of fraudulent and dishonest inducement.

At this stage, it would be relevant to refer to a case of Indian Oil Corporation (supra) wherein it has been observed by the Hon'ble Supreme Court that there is a growing tendency in business circle to convert purely civil dispute into criminal cases. This is obviously on account of the prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lenders/creditors. Such tendency is seen in several family dispute also leading to irretrievable brake down of marriages/families. There is also an impression that if a person could somehow be entangled into a criminal prosecution, there is likelihood in imminent settlement. It has emphatically been said by the Hon'ble Supreme Court in the said decision that any effort to settle civil dispute and claims which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and discouraged.

Thus, there has been no hesitation in coming to the conclusion that the F.I.R. does not constitute offence of cheating. At the same time, in absence of any dishonest intention, the case of criminal breach of trust is also not made out, rather the case appears to be a mere breach of contract.

Going further into the matter, it be recorded that the argument has been advanced on behalf of the opposite party no. 2 that even if the allegation made in the F.I.R. or in the complaint petition does not constitute any offence but if something comes out during investigation showing commission of any other offence, the court in such situation would refrain itself from exercising its inherent power. In this regard, a reference has been made of a case of State of Maharashtra (supra).

It is true that the Hon'ble Supreme Court in spite of finding that the allegation does not constitute offence as alleged, set aside the impugned order, whereby criminal case had been quashed, but that was on account of the fact that certain special feature had emerged out during investigation, wherein it was found that the middle class or the lower class people were induced to invest their hard earned money or the money received at the time of Voluntary Retirement Scheme when rosy picture of the entire scheme was painted and that the company, who had made promise to make payment, was not having any type of business which generates fair legal income/profit, the Hon'ble Supreme Court set aside the order of the High Court whereby entire proceeding had been quashed.

Here in the instant case, it has been stated in the counter affidavit that during investigation some facts have been collected by the investigating agency showing commission of the offence of forgery but at the same time, the statement has been made in the counter affidavit that the Superintendent of Police has directed for lodging a fresh F.I.R. against the petitioners. However, at the same time, the statement has also been made that up till now nothing has been done but the fact remains that the direction is there to lodge a fresh F.I.R. If that is done, the present matter would relate only to the offence of cheating and criminal breach of trust which offences under the circumstances discussed above do not make out, even the entire allegations are taken to be true in its entirety.

Accordingly, the First Information Report of Sidgora P.S. Case No. 207 of 2010 (G.R. No. 3332 of 2010) instituted under Sections 406, 420 and 120B of Indian Penal Code is hereby quashed so far these petitioners are concerned.

In the result, this application is allowed.

(R.R. Prasad, J.) AKT

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Jharkhand High Court