Delhi District Court
Sh. Hari Shankar Sharma vs Smt. Dayawati on 16 December, 2015
Criminal Appeal No.32/15
IN THE COURT OF SH. PULASTYA PRAMACHALA
ADDITIONAL SESSIONS JUDGE
SHAHDARA DISTRICT, KARKARDOOMA COURTS, DELHI
Criminal Appeal No. : 32/2015
Under Section : 420/120-B IPC
Police Station : M.S. Park
FIR No. : 188/2000
Unique I.D. No. : 02402R0310952015
In the matter of :-
1. Sh. HARI SHANKAR SHARMA
S/o. Late Trikha Ram,
R/o. 25/112, Kabir Nagar,
Gali No.5, Delhi.
2. Smt. RAMWATI
W/o. Sh. Hari Shankar Sharma,
R/o. 25/112, Kabir Nagar,
Gali No.5, Delhi.
3. Smt. YASHODA
W/o. Sh. Pawan Sharma,
R/o. B-4/19, Kabir Nagar,
Gali No.5, Delhi.
..............Appellants
VERSUS
Smt. DAYAWATI
W/o. Late Naresh Kumar Gupta,
R/o. H.No.1/2393, Ram Nagar,
Loni Road, Shahdara, Delhi.
..............Respondent
Date of Institution : 02.09.2015
Date of receiving the case in this court : 03.09.2015
Date of reserving order : 02.12.2015
Date of pronouncement : 16.12.2015
Decision : Appeal is dismissed.
Page 1 of 12 (Pulastya Pramachala)
Additional Sessions Judge (Shahdara)
Karkardooma Courts, Delhi
Criminal Appeal No.32/15
JUDGMENT
1. This is an appeal preferred against the judgment dated 24.03.2015, passed by the trial court in a case titled as State v. Dayawati & Ors., bearing FIR No.188/2000, filed under Section 420/120-B IPC. Vide the impugned judgment respondent herein was acquitted of the charges.
FACTS OF THE CASE :-
2. Briefly stated, the relevant facts giving rise to this appeal are that on the basis of complaint made by complainant/appellants herein, an FIR was registered against respondent herein as well as co- accused Anil Jain and Madhu Jain. It was alleged by the complainants/appellants herein that respondent Dayawati was known to them since long, who had been investing their amount in different schemes of LIC, UTI, Post Office etc. On 14.02.1998, complainant-1 got encashed KVP worth Rs.1,40,000/- through respondent and in the same month he sold his agricultural land. He wanted to invest a sum of Rs.1,60,000/- in KVP and he expressed his willingness to respondent to purchase KVP of Rs.3 lac. However, respondent Dayawati induced him to deposit the said amount with M/s. Sheffield Tools Limited representing that said company was her own company and the investment of that company would be entirely at her risk. Respondent took responsibility to fetch good income for the complainant. Believing the promises of respondent, complainants invested Rs.3 lac in the aforesaid company against deposit receipt/FDR issued by that company. Complainants were issued post dated cheques. All the cheques were signed by Director of the company namely Madhu Jain. On the due date of the presentation of the cheque i.e. on Page 2 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 19.02.1999, respondent persuaded the complainant to get the cheques renewed for another one year, after giving assurance about credibility of the company and believing upon her words/promises the cheques were renewed for another year. Now the cheques were encashable on 19.02.2000. When they were presented for encashment on their due date, they were returned unpaid being dishonoured. When the complainants approached the respondent, then she refused to take any responsibility and thus she cheated the complainants. Police investigated the case and chargesheet was filed against respondent herein as well as accused Anil Jain and Madhu Jain. Accused Anil Jain and Madhu Jain were declared proclaimed offender in this case. Charges were framed against accused/respondent herein for offence punishable under Section 420 IPC on 10.09.2009, to which she pleaded not guilty and claimed trial.
3. After conclusion of the trial, the trial court acquitted the respondent observing that the prosecution had not been able to prove the allegation made against the accused/respondent herein. Trial court also observed that there was not a single document to show that accused/respondent herein was the agent or director of the company in question. The prosecution had failed to bring on record any document to show that accused/respondent herein was an agent of M/s. Sheffields Tools Ltd. There was no testimony of any independent witness in respect of the fact that the accused/respondent herein was an agent of M/s. Sheffield Tools Ltd. Beside the testimony of complainants, trial court also observed that no liability could be fastened on the accused unless it was shown that she acted as an agent and in connivance with the Page 3 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 directors of M/s. Sheffield Tools Ltd.
GROUNDS OF APPEAL :-
4. Being aggrieved of the judgment of acquittal passed by the trial court, complainant/appellant has preferred this appeal raising following relevant grounds :-
● Respondent had admitted herself to be agent of the company in case no.1497/2003, however, the trial court ignored this admission. ● Respondent was managing the investment portfolio of the appellants and had earned their trust, which was broken by her and the trial court absolved her despite corroborative evidence being available on the record showing her direct relationship with the fraud company and its directions. Respondent had dishonestly induced the appellants to renew and reinvest the amount in the fraud company and she was liable to be convicted for cheating and criminal breach of trust.
● Respondent falsely denied her relationship with the company in her statement under Section 313 Cr.P.C, though in her complaint case against company, she admitted to be agent of the company. ● The trial court without assigning any reason dismissed two applications under Section 91 and one application under Section 311 Cr.P.C, which were filed to summon the records of complaint filed by respondent against the company, wherein she had claimed herself to be agent of the company.
● The trial court failed to appreciate the evidence on the record and to summon the relevant and material piece of evidence, which would have proved that the respondent was acting as agent of the fraud company.
Page 4 of 12 (Pulastya Pramachala)Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 ARGUMENTS :-
5. Arguments were made by both the parties. Ld. Counsel for appellants argued on the same lines as per grounds raised in the appeal. On the other hand ld. Counsel for respondent contested the appeal and supported the impugned judgment. He submitted that there is no evidence to show that respondent was having any dishonest intention so as to persuade the appellants for investing their amount in the company. He further submitted that respondent had no relation with the company and this fact is well apparent from the FDR/deposit receipts issued by the company. Name of respondent is nowhere mentioned as agent of the company. Appellants had filed complaint against the respondent before consumer forum also, however, in that litigation up to National Commission respondent has been given clean-chit. Respondent herself was a victim of the fraud committed by company and its Directors and she is not responsible for dishonour of cheques given by the company to the appellants. Both parties had referred to different parts of testimony of the complainant to support their arguments.
FINDINGS :-
6. I have given due consideration to the rival contentions and have perused the trial court record.
7. Appellant no.1 was examined as PW-1 in the case. Appellant no.2 was examined as PW-3 and appellant no.3 was examined as PW-
4. PW-1 had given detailed account of the role played by respondent in this transaction. As per testimony of PW-1, he insisted with the respondent that his amount should be invested in KVP, but respondent induced him to deposit the amount in her Page 5 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 company namely M/s. Sheffield Tools Ltd. She also induced him to invest on the pretext that she was responsible to protect his money. PW-1 gave Rs.3 lac to respondent and respondent handed over deposit receipts of company to him. After one year, PW-1 was planning for marriage of his daughter and he asked respondent to return his money. Respondent took deposit receipts and cheque of the company on the pretext that she would get them encashed. However, after 2-3 days, she handed over the deposit receipts along with cheque for amount of Rs.3,50,000/- after renewing his deposit for another one year. PW-1 further deposed that respondent had committed cheating with him and had embezzled his amount.
8. PW-1 was thoroughly cross-examined by counsel for respondent.
In his cross-examination, he admitted that he used to take advise from the respondent for making financial investment. He further deposed that respondent informed him that this company was owned by her and he had narrated this fact in his complaint as well as in his statement made to the police. He further deposed that it may be wrongly recorded in his statement under Section 161 Cr.P.C that respondent had represented that it was a company of her known persons. He further claimed that he had sent a notice to respondent after dishonour of cheques, however, he admitted that such notice was not placed in this file as well as in the case files pertaining to cases under Section 138 NI Act. He denied the suggestion that he knew that his money was deposited with this company. He added that he had given his money for deposit in postal schemes and at a later point of time, he came to know about the deposit of money with the company. He also added that this Page 6 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 deposit with company was made by respondent without his consent. He further deposed that he was illiterate person and he did not remember, if any form was filled by him for making the deposits with the company. He was confronted with the form of the company Ex.PW-1/R-1 and he admitted that it pertained to the company. He deposed that he did not find it necessary to read the contents of deposit scheme or the application form because respondent had told him that the company belonged to her. He also admitted that respondent had also made deposits in the same company, but he was not aware of the total amount invested by respondent and her family members.
9. In respect of renewal of the cheques, he deposed that he did not make any complaint regarding non payment of amount after the cheque was renewed by respondent, as he had trust on her. He admitted that he filed complaint before consumer forum, which went up National Consumer Dispute Redressal Commission and lost the case against the respondent. He also admitted that in the FDR, it was not mentioned that the money was deposited through respondent. He did not make any effort to know the Directors of the company because he had trust on the respondent. He also admitted that during his long association with respondent for 17-20 years, respondent never cheated him. He never visited office of the company, nor did he make any demand from the company or its directors. He also admitted that he did not have any document to show that respondent was owner, director or authorised agent of the company.
10. PW-3 had also claimed that respondent represented to them that she was running the company and she will invest their amount in Page 7 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 her company. Same statement was made by PW-4 also.
11. It is settled law that one of the basic ingredients of cheating is dishonest inducement since beginning of the transaction, on the part of the accused. In S.W. Palanitkar v. State of Bihar (2002) 1 SCC 241, Supreme Court reiterated that "In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promises, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating."
12. In this case, Supreme Court was dealing with a case, wherein one of the appellants had acted as broker between the complainant and another appellant company, thereby arranging an agreement between complainant and company for supply of certain goods. The goods were not supplied by the company to the complainant and complainant made allegations that the broker as well as company had committed cheating. The Supreme Court negated these contentions to be sufficient to make out a case of cheating against the company.
13. The dishonest intention on the part of a cheater has to be assessed on the basis of his/her conduct, his/her relation qua the complainant and the service provider as well as status to arrange the transaction, wherein cheating is alleged to have been committed. There is seldom a direct piece of evidence to show dishonest intention on the part of cheater.
14. In the present case, the respondent had been arranging investment of the amount of complainants/appellants in different schemes Page 8 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 since long time. For such reasons, the appellants had allegedly developed a sense of trust upon the respondent. I do not find any problem with so much of contentions of the appellants. I am also ready to buy the argument that the amount of appellants were invested in M/s. Sheffield Tools Ltd. through respondent. I am also ready to go on assuming that respondent acted as agent of this company. Though, this assumption is not based on the contentions of the appellants, rather it is based on the arguments made by ld. Counsel for appellants. It is wroth to mention here that the appellants had been alleging that respondent represented herself as owner of this company and had promised that she would protect their investment against any loss. Probably ld. Counsel was aware of the evidence on the record, which shows that respondent had no relation with this company and therefore, a new plea was introduced that respondent acted as agent of the company.
15. It is a baseless contention to allege that respondent acted as owner of this company. From the testimony of PW-1, I find that he had been changing his stand in respect of giving consent for investment of his amount in this company. He claimed that he did not give such consent, though in his complaint made to police he averred that he was induced to make such investment in the company. Therefore, it is apparently a false contention that PW-1 had given amount to respondent for investment in KVP and he came to know about the investment in the company after some time. It is also surprising that all appellants came to know about renewal of their cheques, still they kept mum. Such conduct of appellants show that they had consent for this deposit in the company, but they made artificial allegation that respondent made this deposit without consent.
Page 9 of 12 (Pulastya Pramachala)Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15
16. PW-1 identified the application form of the company, which is Ex.PW-1/R-1. No one can say after going through this document that the company was either owned by respondent or that she was related to this company as director or otherwise. Therefore, the contentions of PW-1, PW-3 and PW-4 that respondent had represented to them that this company was owned by her is not worth reliance. Such testimony and contentions of the appellants are apparently an exaggerated and after thought contentions.
17. Now, if the respondent was neither owner, nor director of this company, then at the most it can be assumed that she would have acted as a broker to arrange investment of amount of the appellants in the scheme of this company. A broker/agent cannot be assumed to know the internal financial condition of the company as well as the intentions and planning of the managers of that company. The broker only facilitates filling of applications and deposit of the same with the company and the investors have to make themselves aware of the risk factors involved behind such investment. As it happened in this case, after incurring loss in the investment, the investors cannot put a blame on the broker for causing the loss. Dishonest act of the broker has to be based on some other facts, which could show that the broker was a part and parcel of management of the company and he/she was instrumental in fleeing away with the invested amount of the investors. The facts of this case are crystal clear to show that the directors of the company namely Anil Jain and Madhu Jain are absconding and since respondent was available to the appellants, she has been blamed for all the loss caused to the appellants by the management of the company. Therefore, even if I assume that Page 10 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 respondent acted as agent of the company, it cannot be presumed that she was a part of the game of cheating committed by the company. In the case of Kunstocom Electronics v. State of M.P. 2009 (5) MPLJ 178, High Court of Madhya Pradesh exonerated an agent from the liability of cheating on the grounds that there was no material to show that the agent was having mens rea at the very inception of the transaction between the parties. The complainant had entered into an agreement through the agent with another company for supply of certain materials, but the materials were not supplied by the other company and the court refused to held the agent responsible for non fulfillment of contract by the other company or to assume that he had committed any cheating with the complainant because there was no material to show that the agent knew that the other company would not supply the material in future."
18. In the present case also, it cannot be assumed that while encouraging the appellants to invest in the scheme of the company, respondent was aware that such amount would be misappropriated by the company. There is absolutely no piece of evidence on the record to suggest any such role played by the respondent, in the misappropriation of invested amount of appellants with the company nor is there any material to say that respondent had gained unlawfully out of such misappropriated amount. Rather, it is admitted fact that respondent also filed case against the company for dishonour of cheque issued to her in return of amount invested by her in the company.
DECISION
19. In view of aforesaid findings and observations, I find that the trial Page 11 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi Criminal Appeal No.32/15 court has rightly acquitted the respondent of the charges and no infirmity can be found with the impugned judgment. Accordingly, appeal is dismissed.
20. TCR along with copy of judgment be sent back to the trial court.
File be consigned to record room, as per rules.
Announced in the open court (PULASTYA PRAMACHALA) today on 16.12.2015 Additional Sessions Judge (Shahdara) (This order contains 12 pages) Karkardooma Courts, Delhi Page 12 of 12 (Pulastya Pramachala) Additional Sessions Judge (Shahdara) Karkardooma Courts, Delhi