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22.   The distinction between mere breach of  contract   and  the  offence   of criminal   breach  of trust and cheating are fine one. In case  of cheating, it depends upon the intention of  the accused at the time of inducement, which  may be judged by a subsequent conduct but for  this the subsequent conduct is not the sole  test but mere breach of contract which cannot  give   rise   to   a   criminal   prosecution   for  R/CR.MA/4033/2012 JUDGMENT cheating   unless   fraudulent   or   dishonest  intention  is  shown  right   from  the  beginning  of   the   transaction   i.e.   the   time   when   the  offence   is   said   to   have   been   committed.  Therefore, it is his intention, which is the  gist   of   the   offence.   Whereas,   for   the  criminal   breach  of  trust,  the  property  must  have been entrusted to the accused or he must  have   dominion   over   it.   The   property   in  respect of which the offence after the breach  of   trust   has   been   committed   must   be   either  the   property   of   some   person   other   than   the  accused   or   the   beneficial   interest   in   or  ownership of it must be of some other person.  The accused must hold that property on trust  of such other person. But the offence, i.e.  the offence of breach of trust and cheating  involve   dishonest   intention   but   they   are  mutually   exclusive   and   different   in   basic  concept.   There  is  a distinction  between  the  criminal   breach   of   trust   and   cheating.   For  cheating, criminal intention is necessary at  the  time   of entrustment.   In criminal   breach  of   trust,   mere   proof   of   entrustment   is  sufficient. Thus, in case of criminal breach  of trust, the offender is lawfully entrusted  with   the   property   and   he   dishonestly  misappropriates the same. Whereas, in case of  cheating,   the   offender   practices   fraud   or  R/CR.MA/4033/2012 JUDGMENT dishonestly induces another person to deliver  the   property.   In   such   situation,   both   the  offences cannot co­exist simultaneously.  

36.  In the aforesaid context, I may refer to  and rely upon a decision of this Court in the  case   of  Arvindbhai   Ravjibhai   Patel   vs.  Dhirubhai   Sambhubhai   Kakadia,   1998   Criminal  Law   Journal   463,  wherein   a   learned   Single  Judge of this Court observed as under :­   "4.1.   Now,   it   is   simply   not   possible   to   accept   the   above   contention   of   Mr.   Vin.   Whether   the   accused   had   an   intention   to   cheat   right   from   the   beginning   or   not   is   ordinarily and always a matter of evidence   either   to   be   adduced   before   the   Court   at   the time of trial, or reasonably inferred   from the attending facts and circumstances   of the case as narrated in the complaint !  Apart   this,   assuming   for   the   sake   of   argument   even   that   there   was   indeed   no   intention of the accused at the time when   Rs. 90,000/­ came to be borrowed and paid   in   cash.   But   then,   in   a   given   case,   it   cannot   be   ruled   out   that   though   at   the   R/CR.MA/4033/2012 JUDGMENT initial   stage   there   may   not   be   any   such   intention   to   cheat,   yet   with   the   passing   of   time,   the   dishonest   intention   not   to   pay   the   borrowed   amount   can   certainly   develop   !   For   criminal   offence   and  consequential punishment what is necessary   is the element of "mens­rea" and this in a  given   case   can   be   there   right   from   the   beginning   or   that   may   as   well   develop   subsequently   and   gain   root   making   the   person   accused   dishonest   liable   for   the   punishment. Not only this, but let us test   this   aspect   of   subsequent   development   of   dishonesty   from   yet   another   angle.   Accordingly, if indeed, the accused had no   intention to cheat, and accordingly he was   rather   ready   and   willing   to   pay   up   the   amount   due,   then   he   should,   in   the   first   instance,   pay   up   the   same   and   in   the   second   instance,   failing   to   pay   up   prove   his   bona   fide   by   showing   that   because   of   some   unforeseen   unfortunate   intervening   circumstances,   unexpected   loss   or  financial   crisis   he   came   to   be   prevented   by   the   circumstances   beyond   control   and   was   unable   to  pay   ­  in  other   words   there   was   no   dishonest   intention   to   honour   the   obligation.   If   this   is   not   done   by   the   accused,   the   Court   would   be   quite   justified   in   drawing   the   legitimate   inference   from   the   proved   facts   that   the   accused   had   dishonest   intention   of   not  paying   the   amount,   may   be   from   beginning   or   may   be   subsequently   !   Atleast   before   filing  the complaint  under  Sections 406  &  420 of the I.P.C. before the Court. The reason   is   intention   is   never   writ   large   on   face   of   the   accused.   In   fact,   taking   into   consideration   unpredictable   changing   nature   of   human   beings,   it   can   be  reasonably   said   with   certainty   that   a   person who was honest at a stage and point  of time, may subsequently become dishonest   R/CR.MA/4033/2012 JUDGMENT with the passage of time. This is the hard  fact   and   reality   of   life   !   It   is   a   part   and   parcel   of   thinking   process   which   is   not   readable   to   ordinary   eyes.   It   can   be   read   with   mental   eye   of   just   and   proper   inference. Further still, whether a person   had   an   intention   to   cheat   right   from   the   beginning or not, can certainly be judged   from   his   subsequent   and   ultimate   conduct   of   not   paying   of.   In   this   view   of   the   matter, when a person takes loan, borrows   some   amount   and   despite   his   financial   capacity   to   pay,   does   not   pay,   then   in   that case once the evidence of complainant   prima facie satisfies the Court about the   alleged transaction and proves case to the   said   extent   then   ordinary   and   reasonable   inference   of   cheating   needs   to   be   drawn,   unless   of   course   as   stated   above,   the   accused   has   some   material   justifying   his   stand   not   to   honour   his   obligation,   negativating   dishonest   intention   to   cheat ! But there also, this is once again  a   matter   of   defence   which   is   required   to   be pleaded, tested out and ultimately get   convinced to the Court!! Thus, looking to   the   nature   of   allegations   in   complaint,   and   subsequent   conduct   of   accused   in   not   paying   back   loan   amount   it   is   indeed   not   possible   for   this   Court   to   say   at   this   stage   that   it   does   not   contain   the   germs   constituting   prima   facie   offence   of  cheating   against   the   petitioner­accused   for   taking   the   cognizance   of   the   alleged   offence   by   the   learned   Magistrate,   under   Sections 406,  420,  504  and  506(2)  of   I.P.C.   If   after   taking   loan,   for   the   considerable   period the same is not paid till the date   the   complaint   is   filed,   then   from   that   point   of   time   it   can   be   prima­facie   said   that he had the dishonest intention not to   pay   right   from   the   beginning.   If   the   law   is   not   interpreted   in   this   manner,   R/CR.MA/4033/2012 JUDGMENT dishonest   persons   would  schemingly   skip   the   law   and   defeat   the   justice.   That   is   not   the   way   to   handle   criminal   justice   system ! In this view of the matter, there   is   no   question   of   quashing   and   setting   aside   the   complaint   filed   by   the   respondent   and   accordingly,   this   petition   deserves to be dismissed."

42.      Before   parting   with   this   judgment,   I  would   like   to   observe   that   the   Legislature  enacts laws to arrest unsocial or undesirable  activities which cause harm to the society at  large and prescribes deterrent punishments to  prevent   such   activities   being   taking   place. 

R/CR.MA/4033/2012 JUDGMENT Judicial notice can be taken of the fact that  there is a sea­change in the human values and  that   the   human   values,   etc.   of   the   21st  century  are  different  from  those   which  were  prevailing   in   the   19th  century.   The   history  tells us that the people in this country, by  and large, were honest and law abiding during  1860,   i.e.   the   19th  century,   when   the   IPC  came into force on 6th October, 1960. At that  point of time, a person was able to purchase  one bag of rice with one rupee. Now a bag of  rice   cost  more  than  Rs.1000/­. The  salaries  of many Government servants and officers, at  that point of time, were in two figure. Now  even   a   Class­IV   employee   earns   four   figure  salary.  Obviously,  keeping  in  view  the  said  fact, the enactments like the Narcotic Drugs  and   Psychotropic   Substances   Act,   1985,   and  the   Information   Technology   Act,   2000,  prescribe   fine   in   lakhs   of   rupees   for   the  offences   committed   under   those   enactments.  But, the fine prescribed in the IPC, way back  in   1860,   which   at   that   time   could   be   a  deterrent,   has   remained   unchanged   till   this  date, i.e. more than 140 years after the IPC  was   enacted.   In   the   present   day   situation,  the   meager   fine   prescribed   in   several  sections   of   the   IPC,   can   by   no   stretch   of  imagination,   be   said   to   be   deterrent   to  R/CR.MA/4033/2012 JUDGMENT prevent   such   offences.   Since   the   greed   to  become rich overnight by any means has become  the   order   of   the   day,   and   taking   notice   of  the  fact   that  several  individuals  and  bogus  institutions, by promising rich returns, are  alluring innocent people into investing their  hard earned money with them and are vanishing  overnight, the Legislature, in an attempt to  prevent   such   operation,   made   some   laws,  obviously because such act may not fall under  "cheating" as defined in Section 415 of the  IPC. "Cheating" as understood by a common man  is  different   from  "cheating",  as  defined   by  Section 415 IPC, because for "cheating" to be  an   offence   under   the   IPC,   the   intention   to  cheat   even   at   the   time   of   entering   into   a  transaction   has   to   be   established.   In   the  present   day   situation,   when   honesty   has  become a very rare commodity and since nobody  would   make   apparent   his   intention   to   cheat  even at the time of inception and since the  persons   resort   to   cheating   only   after  creating a confidence about his being honest  in the mind of the man he intends to cheat,  in   my   considered   opinion,   it   may   be   in   the  fitness of things and to suit the present day  need, to cast the burden to establish that he  had no intention to cheat on the accused, by  making   suitable   amendments   to   Section   415  R/CR.MA/4033/2012 JUDGMENT IPC. (See Vishal Papter Tech) (Supra)       

43.  What type of circumstances prevented the  accused   from   not   fulfilling   the   promise   to  repay   the   amount   would   be   something   within  the special knowledge of the accused. In such  circumstances,  it  is  very  difficult  for  the  complainant   to   establish   that   the   intention  of the accused was dishonest right from the  inception.   If   the   intention   to   cheat   is  apparent on the face of the accused, or if he  proclaims that he has an intention to cheat  even   at   the   time   of   entering   into   the  transaction,   there   can   be   no   scope   for   the  complainant   to   enter   into   the   transaction,  because  no  ordinary  prudent  man  would  enter  into   the   transaction   with   another   person  fully knowing that the person with whom he is  entering   into   the   transaction   has   an  intention   to   cheat   him.   Let   this   aspect   be  looked into by the Legislature.