Telangana High Court
Kadasi Anil Kumar Raju Raji Reddy ... vs The State Of Telangana on 28 April, 2022
Author: Lalitha Kanneganti
Bench: Lalitha Kanneganti
THE HON'BLE SMT.JUSTICE LALITHA KANNEGANTI
CRIMINAL APPEAL No.1307 of 2018
J U D G M E N T:
This Criminal Appeal under Section 374(2) of Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') is filed against the conviction and sentence vide judgment dated 09.04.2018 in Calendar Case No.7 of 2014 on the file of the Principal Sessions Judge, Karimnagar.
2. The appellant was tried for the offences under Sections 406, 420 of IPC and Section 5 of the A.P. Protection of Depositors of Financial Establishments Act, 1999 (for short "Act 1999"). The appellant was convicted and sentenced to undergo simple imprisonment for seven years and also pay fine of Rs.50,000/-, in default of payment of fine amount, he shall undergo further imprisonment for six months for the offence under Section 420 of IPC. Whereas, he was acquitted for the offence under Section 406 of IPC and Section 5 of Act 1999.
3. The case of the prosecution is that P.W.1 gave report to police on 08.02.2012 stating that on 26.11.2011 on coming across a newspaper advertisement in Eenadu newspaper that loan will be provided from Rs.5 lakhs to Rs.50 2 lakhs at low rate of interest. So he contacted the accused and he stated he is running IMI Financial Services situated at Tower Circle, Karimnagar and asked P.W.1 to come to his office. Then P.W.1 went to office and the accused assured him that he would lend Rs.6 lakhs on payment of Rs.5,000/- for one lakh towards documentation charges. Then on 21.12.2011 P.W.1 paid Rs.20,000/- stating that he will pay the balance of Rs.10,000/- on the date of mortgage, for which accused also gave receipt and took Photostat copies of pattadar pass book, ration card and photos. The accused visited the village of P.W.1 on 28.12.2011 and assured that he would pay loan amount within a week. On 10.12.2011 the accused assured to pay Rs.2 lakhs and gave it in writing. Similarly P.W.2 also paid Rs.15,000/- to the accused under a receipt. On 08.02.2012 when P.Ws.1 and 2 went to the office of accused, the same was closed and there they met P.W.3 from whom the accused collected Rs.25,000/-. Basing on the said report, a case in Crime No.44 of 2014 under Section 420 of IPC was registered. During the course of investigation, P.W.9 arrested the accused at his house in the presence of mediators, got recorded his confession and seized several documents creating mortgage in the name of accused, a computer, a laptop, office records, cell phones, one Santro Car, one motorcycle and 3 cash of Rs.50,000/-. After completion of investigation, charge sheet was filed.
4. Cognizance was taken against the accused for the offence under Section 420, 406 of IPC and Section 5 of Act 1999 and charges were framed under the above section of law, read over and explained to him in Telugu for which he pleaded not guilty and claimed to be tried.
5. In support of its case, the prosecution examined P.Ws.1 to 10 and got marked Exs.P-1 to P-14 and M.O.s.1 to 17. After completion of the prosecution evidence, the appellant was examined under section 313 Cr.P.C. and he denied the incriminating material appearing against him in the evidence of prosecution witnesses and reported no defence evidence. Exs.D- 1 to D-3 were marked on behalf of accused.
6. On a thorough analysis of the evidence available on record, the trial Court convicted the appellant as indicated above. Assailing the same, the appellant is before this Court.
7. Heard Ms.G.Jaya Reddy, learned counsel for the appellant and learned Assistant Public Prosecutor appearing on behalf of respondent.
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8. Learned counsel for appellant submits that the trial Court rightly acquitted the accused for the offence under Section 406 of IPC and Section 5 of Act 1999, but went wrong in convicting the accused for the offence under Section 420 of IPC, though the prosecution failed to bring home the guilt of the accused beyond reasonable doubt. She submits that trial Court failed to appreciate that ingredients of cheating and dishonest intention as required under Section 420 of IPC are not made out. She submits that mere failure to keep up the promise not amounts to the act of cheating in the absence of any dishonest intention at the time of making such promise. She submits that the trial Court ought to have seen that no criminal liability can be fastened on the accused, unless there is any sufficient evidence is placed to show dishonest intention right from the inception, which is non-existent in the case on hand. She submits that the trial Court ought to have seen that none of the victims examined by the prosecution could show by producing paper advertisement said to be issued by the accused attracting public, moreover, there several contradictions and omissions in the evidence of prosecution witnesses. She submits that the trial Court failed to see that the handwriting of accused is not 5 proved with reference to receipts marked, yet the trial Court upon an erroneous view convicted the accused.
9. Per contra, learned Assistant Public Prosecutor submits that prosecution has proved the guilt of the appellant beyond all reasonable doubt and the trial Court after appreciating the entire evidence on record, has convicted the accused. The evidence of prosecution clearly goes to show that accused cheated the innocent public by offering attractive rate of interest and made them to entrust their hard earned money, but finally closed the office and thus, the accused has got dishonest intention right from the beginning to cheat the public. The judgment of the Court below is a well considered one and no grounds are made out to interfere with conviction and sentence imposed by the trial Court.
10. The Court below convicted the appellant by observing that the modus operandi of the accused is clear and it is to make believe the people who approaches him for loan and who paid the amounts, made them to wait for some time by stating that he would visit the property and accordingly, inspecting the property by going to their respective villages, which it appears is only with a view to attract more people in 6 the neighbourhood to collect money from them. The trial Court also held that the prosecution established that the accused is having dishonest intention of cheating the public, he collected amounts from P.Ws.1 to 8 with a promise to lend money and finally after receiving the property documents, disappeared by closing the so called business premises.
11. Having heard the learned counsel on either side, perused the entire material on record.
12. In this case, P.Ws.1 to 6 are victims, who categorically deposed that on verifying their land documents, the accused promised to lend amounts to them and he also collected various amounts from them and issued Exs.P-2 to P-9 receipts. The said receipts are printed forms with the name of IMI Financial Services Consultancy with its address. Admittedly, P.Ws.1 to 6 are residents of different villages and all of them approached the accused on seeing the paper advertisement with regard to obtaining loan on their properties.
13. The first and foremost contention of the learned counsel is that though the prosecution could establish the dishonest intention right from inception, as the ingredients of cheating are not established, the Court below erred in convicting the accused under Section 420 IPC. 7
14. Section 415 has two parts. While in the first part, the person must 'dishonestly' or 'fraudulently' induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay (AIR 1956 SC 575 : 1956 Cri.L.J 1116) a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure conviction of a person for the offence of cheating, 'mens rea' on the part of that person, must be established. It was also observed in Mahadeo Prasad v. State of W.B.(AIR 1954 SC 724 :
1954 CrlLJ 1806) that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.
G.V. Rao v. L.H.V. Prasad1
15. 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, 1 (2000) 3 SCC 693 8 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.
(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.
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. 9 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.
16. 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 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. 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.
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Hridaya Ranjan Prasad Verma v. State of Bihar2
17. Coming to the facts of this case, the evidence of P.Ws.1 to 6 who are independent witnesses and residents of different places clearly goes to show that on seeing the paper advertisement, they have parted with money under receipts, but the accused failed to sanction loan to them as promised by him. Thus, the conduct of accused in publishing the advertisement in newspaper shows the intention to deceive was in existence at the time when such publication was made and thus, mens rea on the part of the accused is established. P.Ws.1 to 6 are unconnected and unrelated to each other and they are all independent witnesses, who paid amounts to the accused and later, the accused failed to sanction loan to them, as promised by him. Therefore, the prosecution could establish the ingredients of offence of cheating i.e. dishonest intention of the accused to cheat the innocent public right from the beginning. Further, the evidence of P.W.9 who is the investigating officer clearly establishes that basing on the confession of accused he seized Exs.P-2 to P-9 receipts which are issued by the accused. 2 (2000) 4 SCC 168 11
18. On overall consideration of entire evidence on record, this Court is of the opinion that the prosecution could establish the ingredients of cheating and thereby the accused with a dishonest intention right from the beginning had collected amounts from P.Ws.1 to 6 on the pretext of sanctioning loan to them with lower rate of interest and ultimately he failed to do so. Hence, the trial Court has rightly convicted the accused for the offence punishable under Section 420 of IPC and there are no grounds to interfere with the conviction and sentence imposed by the Court below.
19. Accordingly, the Criminal Appeal is dismissed confirming the conviction and sentence vide judgment dated 09.04.2018 in Calendar Case No.7 of 2014 on the file of the Principal Sessions Judge, Karimnagar.
20. As a sequel, pending miscellaneous petitions, if any, shall stand closed.
__________________________________ JUSTICE LALITHA KANNEGANTI 28th April 2022 ksld 12 THE HON'BLE SMT.JUSTICE LALITHA KANNEGANTI CRIMINAL APPEAL No.1305 of 2018 13 .01.2022 PVD