Ranjan Sachdeva vs The State Of West Bengal & Anr
2022 Latest Caselaw 3769 Cal

              IN THE HIGH COURT AT CALCUTTA
             CRIMINAL REVISIONAL JURISDICTION
                      APPELLATE SIDE
Present:
The Hon'ble Justice Ajoy Kumar Mukherjee

                            C.R.R. 3561 of 2019

                              Ranjan Sachdeva
                                     -vs-
                       The State of West Bengal & anr.

  For the Petitioner           : Mr. Rachit Lakhmani
                                 Ms. Afree Begum

  For the State                : Mr. Madhusudan Sur
                                 Mr. Saryati Dutta

  Heard on                     : 21.6.2022

  Judgment on                  : 30.06.2022


 Ajoy Kumar Mukherjee, J.

1. This revisional application has been directed to quash/set aside the FIR

bearing No.812 of 2019 dated October 3, 2019 registered by Sankrail Police

Station pursuant to the complain dated October 2, 2019 made by the

complainant/opposite party no.2, Sk. Azizul Rahaman.

2. The petitioner has contended in his revisional application that on

November 12, 2019 he received a copy of notice dated October 24, 2019 along

with a copy of FIR bearing No.812 of 2019 dated October 3, 2019 wherein it

has been alleged that the complainant had supplied readymade garments by

truck to the petitioner towards which the petitioner issued a cheque bearing

No.039173 amounting to Rs.50,00,000/- to the complainant, which was

dishonoured and as a result of which the complainant claims to have been

cheated by the petitioner.

3. The petitioner is absolutely innocent and in no way connected with the

commission of the alleged offence and he has been falsely implicated out of

grudge and ill motive and due to a vengeful attitude on the part of the

complainant.

4. Mr. Rachit Lakhmani, learned counsel on behalf of petitioner submits

that no goods whatsoever was supplied by the complainant /opposite party no.

2 to the petitioner and complainant has failed to disclose any document to

show that there was any transaction which took place between the

complainant and the petitioner. The petitioner had given the said cheque to

the complainant as a security for supply of goods. Moreover, the issue of

dishonoured cheque is the subject matter of a proceeding under Section 138 of

the Negotiable Instruments Act initiated by the complainant /opposite party

no. 2 against the petitioner before the Court of learned Judicial Magistrate, 6 th

Court, Howrah. Before initiating the aforesaid proceeding under Section 138 of

the Negotiable Instruments Act complainant sent notice through his advocate

on September 4, 2019 upon the present petitioner and the said notice did not

have any mention of committing such offence and does not even contain a

whisper relating to cheating and/or criminal breach of trust. Accordingly, it is

evident that the complain which culminated into the said FIR under Sections

406/420 of the Indian Penal Code is nothing but a mere afterthought being

used by the complainant to harass the petitioner. Furthermore, from a bare

reading of the complain, no case of cheating and/or criminal breach of trust is

made out against the petitioner. Actually, the complainant is attempting to

use the criminal machinery as a tool to extort money from the petitioner which

the complainant does not deserve. Accordingly, the petitioner has prayed for

quashing the FIR being No.812 of 2019 dated October 3, 2019 which is

registered by Sankrail Police Station, Howrah.

5. Learned counsel for the State Mr. Madhusudan Sur submits that

investigation has already been ended in charge-sheet and the Sankrail Police

Station has submitted charge-sheet against the petitioner under Sections

406/420 of the Indian Penal Code on December 31, 2021.

6. The basic facts contained in the FIR are as follows:-

a) The complainant had a long standing business relationship and

transaction with the accused/petitioner herein and he had every trust

on the accused/petitioner and he believed him.

b) One year back as per verbal order and request made by the

accused/petitioner, opposite party no.2 send huge quantity of

readymade garments, the value of which would be Rs.1 crore, to the

business place of petitioner in Delhi by truck and the said garments

were duly received by him.

c) The petitioner/accused started payment part by part to complainant

against the said amount and thus, he made payment of Rs.22 lakhs.

d) In order to make rest part of payment, petitioner/accused issued a

cheque amounting to Rs.50 lakhs.

e) When the said cheque deposited to the banker of the opposite party

no.2, it got dishonoured on the ground of "insufficient fund".

f) The opposite party no.2/complainant informed about dishonor of said

cheque to the petitioner/accused and though accused/petitioner had

assured him to make the entire payment within few days but

ultimately he did not pay to the opposite party no.2/complainant, nor

he has returned the garments.

g) Accordingly, the petitioner/accused had given false assurance to

opposite party no.2 with a clear intention to cheat him from the very

beginning of the instant transaction, though he neither paid the total

due amount of Rs.79 lakhs nor return the readymade garments which

was delivered to him by the opposite party no.2/complainant.

h) The petitioner/accused further cheated him by issuing account payee

cheque which was dishonoured.

i) Had it been known to the opposite party no.2/complainant that he

would be cheated by the petitioner then he would have never supplied

the said huge amount of readymade garments to him and had it been

known to him that he would be cheated by the petitioner by accepting

the said cheque which he issued in his favour, knowing fully well that

it would be dishonoured, he would have never accepted the said

cheque.

7. On perusal of case diary, it appears that during investigation police had

seized certain challans in support of delivery of goods to the accused/petitioner

by opposite party no.2/complainant and during investigation police has also

recorded statement of some witnesses.

8. On perusal of the statement made by the witnesses under Section 161, it

appears that witnesses have stated that the petitioner/accused has received

the readymade garments which were delivered to him, but in spite of repeated

demand he is not paying the due amount and on the contrary, the cheque

given by him has been bounced.

9. The witnesses further admitted about the long standing business

relationship in between the accused/petitioner and the complainant and they

have not stated anything about the alleged cheating or about criminal breach

of trust.

10. In the above backdrop, it is to be examined whether allowing the

present proceeding to continue would be an abuse of the process of the Court

or not and whether in the present case, in order to secure ends of justice,

jurisdiction under Section 482 of the Code of Criminal Procedure should be

invoked or not. In G. Sagar Suri and another Vs. State of Uttar Pradesh

and others, reported in (2000) 2 SCC 636, Apex Court observed in paragraph

no.8:

"8. Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."

11. In Hridaya Ranjan Prasad Verma and others Vs., State of Bihar and

another, reported in (2000) 4 SCC 168, it was held that there is a fine

distinction between mere breach of contract and the offence of cheating. It

depends upon the intention upon the accused at the time of 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.

12. In Vir Prakash Sharma Vs., Anil Kumar Agarwal and another,

reported in (2007) 7 SCC 373 it was held that non-payment or under-payment

of the price of the goods by itself does not amount to commission of an offence

of cheating or criminal breach of trust.

13. In the present context it is not the case of the opposite party

no.2/complainant that no payment has been made in connection with the

alleged delivery of readymade garments. On the contrary, it has been

specifically stated in the written complaint that in terms of said transaction,

accused had made part payment of Rs.22 lakhs. There is no factual

foundation of the allegation of initial deception and such allegation is merely

an inference drawn by the opposite party no.2 from subsequent failure of the

accused/petitioner to keep his promise by not making the payment of the

balance amount. The basic fact constituting initial deception by way of false

representation on the part of the petitioner at the outset of initiation of

transaction has neither been expressly stated nor otherwise suggested in the

FIR. The materials appearing in the case diary namely the statements

recorded under Section 161 of the Code of Criminal Procedure, also does not

suggest that there was any initial deception by way of false representation on

the part of the accused. When an amount of Rs.22 lakhs have been admittedly

paid against the total bills, it can hardly be said that the accused had no

intention to pay right from the beginning of the transaction. Accordingly, the

initial deception which is the basic ingredient of cheating is conspicuously

absent in the present case. Similarly, there may be a breach of contract made

by the petitioner due to non-payment of balance amount, which can always be

the subject matter of a civil court but in order to establish criminal breach of

trust, mens rea must have been disclosed to give rise to a criminal prosecution.

14. In Alpic Finance Limited Vs. P. Sadasivan and another, reported in

(2001) 3 SCC 513, It was held by the Apex Court in paragraph 10:-

"10.The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420 IPC and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception".

15. In Satishchandra Ratanlal Shah Vs. State of Gujarat and another,

reported in (2019) 9 SCC 148, It was held in paragraph 12, 13 and 14 as

follows:-:-

"12. In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 IPC. Hence the learned Magistrate

committed a serious error in issuing process against the appellant for the said offence. Unfortunately, the High Court also failed to correct this manifest error.

"13. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar [Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786] .) In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached Respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.

"14. Moreover, this Court in a number of cases has usually cautioned against criminalising civil disputes, such as breach of contractual obligations (refer to Gian Singh v. State of Punjab [Gian Singh v. State of Punjab, (2012) 10 SCC 303 : (2012) 4 SCC (Civ) 1188 : (2013) 1 SCC (Cri) 160 : (2012) 2 SCC (L&S) 988] ). The legislature intended to criminalise only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 IPC".

16. In view of the above, it is clear that a plain reading of complain as well as

materials collected during investigation does not disclose ingredients of offence

of criminal breach of trust or cheating, alleged to have been committed by the

present petitioner. The complaint also does not disclose what role was played

by the petitioner with regard to the offence of cheating or criminal breach of

trust. The charge-sheet submitted in this case does not disclose why petitioner

has been implicated under the charge of cheating or criminal breach of trust.

The witnesses during investigation have categorically admitted that there was a

business relationship in between the parties and the goods were delivered as a

part of business transaction and part payment has also been made by the

petitioner and in order to make payment of the rest amount he had issued

cheque which got dishonoured due to insufficient fund and for which Section

138 proceeding has already been initiated by the opposite party no.2. There is

no prima facie material to show that the present petitioner committed any

offence under Sections 406/420 of the Indian Penal Code.

17. In the above circumstances, I find that the continuation of the present

criminal proceeding pending against the present petitioner will be sheer abuse

of process of court in view of the fact that there is remote chance of convicting

the present petitioner either under Section 420 or under Section 406 of the

Indian Penal Code, on the basis of materials available so far during

investigation and therefore, I find sufficient reason to invoke the inherent

power under Section 482 of the Code of Criminal Procedure to quash the

present proceeding.

18. Accordingly, the revisional application being CRR 3561 of 2019 is

allowed. The proceeding initiated vide Sankrail P.S. FIR No. 812 of 2019 dated

October, 3, 2019 is quashed.

However, there shall be no order as to costs.

Urgent photostat certified copies of this order may be delivered to the learned

Advocates for the parties, if applied for, upon compliance of all formalities.

(AJOY KUMAR MUKHERJEE, J.)