Gautambhai Kantilal Choksi vs State Of Gujarat
2021 Latest Caselaw 5824 Guj

    R/SCR.A/1864/2015                               CAV JUDGMENT DATED: 11/06/2021




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

          R/SPECIAL CRIMINAL APPLICATION NO. 1864 of 2015

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
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1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2       To be referred to the Reporter or not ?

3       Whether their Lordships wish to see the fair copy of the
        judgment ?

4       Whether this case involves a substantial question of law

as to the interpretation of the Constitution of India or any order made thereunder ?

============================================ GAUTAMBHAI KANTILAL CHOKSI Versus STATE OF GUJARAT & 1 other(s) ============================================ Appearance:

MS MOXA THAKKAR ADDL. PUBLIC PROSECUTOR(2) for the

============================================

CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

Date : 11/06/2021

CAV JUDGMENT

1. Heard learned Advocate Shri J.M. Panchal with Shri K.J. Panchal, learned Advocate for the applicant and learned Advocate Shri Nisarg Shah

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for learned Advocate Shri N.M. Kapadia for the respondent No.2 - original complainant and learned APP Ms. Moxa Thakkar for the respondent No.1

- State.

2. Rule returnable forthwith. Learned APP waives service of Rule on behlaf of the respondent No.1 - State and learned Advocate Shri Nisarg Shah waives service of Rule on behalf of the respondent No.2.

3. By way of this petition, the petitioner prays for quashing of the criminal complaint being C.R. I No.18 of 2015 registered with Viramgam Police Station, Dist. Ahmedbad Rural, for the offences punishable under Section 406, 420 and 114 of the Indian Penal Code.

4. Brief facts leading to filing of the present petition are as under: 4.1 Criminal complaint bearing C.R. I No.18 of 2015 came to be registered with Viramgam Police Station, Dist. Ahmedabad Rural by respondent No.2 - original complainant - Shitalbhai Subodhchandra Shah inter alia alleging that he had purchased a land bearing Survey No. 534 situated at village: Asal admeasuring 25485 Sq. Mtrs. from accused No.1 Rekhaben Shantilal Vadlani vide registered sale deed No.2109/2007 dated 06.08.2007 by paying consideration of Rs.1,25,000/-. It is alleged in the complaint that since the land had been mortgaged to one Jay Yogeshwar Seva Sahkari Mandali Ltd. by accused No.1 and since the land was of restricted tenure therefore the name of the petitioner was not mutated in the revenue records and whereas the accused No.1 and her husband had undertaken to do the needful to have mortgage redeemed and to get the land converted into old / unrestricted tenure. It is alleged that taking disadvantage of the situation, the accused No.1 had executed second registered sale deed with the present petitioner on 11.05.2010. That when the complainant had made an application to have his name mutated in the revenue records, a pencil entry No.2511 dated 05.08.2011 had been entered into the revenue records and accused No.1 had objected to the same and

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therefore, RTS Case No.211 of 2011 came to be registered and vide order dated 24.10.2011 entry in favour of the complainant came to be rejected and therefore, the complainant has appealed against the same to the Deputy Collector. It is stated that later on the accused No.1 had also created a charge over the land in question by taking loan of Rs.10 Lakhs from the Jay Yogeshwar Seva Sahkari Mandli Ltd. and entry 2288 dated 11.06.2010 with regard to the same, had also been mutated in the revenue records. It would be pertinent to mention that while allegation against the accused No.1 are of selling the land to the original complainant herein inspite of having sold the land to the original complainant and also of having availed loan over the said land after sale with the complainant, the allegations against the present petitioner in the complaint are that he did not exercise due diligence for ascertaining the title of the property before entering into a sale deed with the complainant.

5. Learned Advocate Shri Panchal for the petitioner submits that there are no allegations in the complaint which support the allegation of the commission of the offence punishable under Section 406, 420 read with Section 114 of IPC against the petitioner. He further submits that the petitioner is a Chartered Accountant by profession, having sound reputation and that there is no allegation against the applicant having been involved in any criminal case herein before that the only allegation which could levelled against the applicant was not exercising due care and caution before purchasing the land in question. He further submits that as such as soon as the petitioner came to know about the complainant having entered into an earlier sale deed and having later sold the said land to the petitioner, he had immediately executed an agreement dated 10.06.2011, whereby earlier sale deed dated 12.05.2010 had been cancelled. He further submits that at no point of time, the petitioner staked his claim in respect of the property in question nor had he attempted to take the possession of the property. Under

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such circumstances, he submits that the petitioner himself was a victim of the fraud perpetrated by the accused No.1 and by entering into the transaction with the accused No.1, it could not be alleged that the petitioner had committed an offence under punishable under Section 406 and 420 of IPC. Learned Advocate for the petitioner further submits that bare reading of the complaint reveals that there is no allegation as such of having committed any cognizable offence. He further submits that at the relevant point of time, since the revenue records showed that the accused No.1 as owner of the property and while it is undoubtedly true that the applicant ought to have been more vigilant, but at the same time, he submits that lack of vigilance would not automatically result into present petitioner being brought under the ambit of a criminal complaint. He further submits that as such perusal of the registered sale deed between the petitioner and accused No.1 clearly reveals that the accused had misled the petitioner to believe that she was owner of the property and that except accused No.1, nobody else had any right, title or interest over the property in question. Thus, submitting learned Advocate Shri Panchal has requested that this Court may quash the criminal complaint in so far as present petitioner is concerned.

6. As against the same, learned Advocate Shri Nisarg Shah for learned Advocate Shri Kapadia has submitted that it is well settled law of complaint is not encyclopedia and whereas all the facts are not required to be mentioned in the complaint. He further submits that the petitioner was not bona fide purchaser inasmuch as the petitioner has stated that he had only inspected the revenue records and whereas like a reasonable and prudent person would do the petitioner ought to have taken search of the record of the Sub-Registrar confirming the title and ownership of the accused No.1. Learned Advocate further submits that the fact of the petitioner not being bona fide purchaser can be gathered from the fact that the petitioner had not filed any complaint against the accused No.1, more particularly, since

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the petitioner states that the petitioner was also cheated by the complainant. Furthermore, he submits that cancellation of sale deed was only after the complainant had made an application to the police authorities. He further submits that the transaction between the petitioner and accused No.2 was in connivance with each other with an intention to dupe the petitioner. Thus, submitting learned Advocate for the complainant has submitted that this Court may not interfere with the impugned complaint.

7. Learned APP Ms. Moxa Thakkar has submitted that State has carried out its duties and whereas serious allegations have been levelled against the petitioner therefore, this Court may no interfere with the complaint at this stage.

8. Learned Advocates for the respective parties have not submitted any further arguments.

9. Heard learned Advocates for the parties and perused the record. At the outset, it is required to be noted that the complaint came to be registered on 11.03.2015 and whereas the applicant had approached this Court on 26.03.2015 and this Court vide order dated 30.03.2015 had been pleased to protect the petitioner by staying further proceedings arising from the impugned complaint.

10. The complainant has alleged the offences punishable under Sections 406, 420 and 114 of IPC against the present petitioner. The allegations having that the petitioner has purchased the property, which had already been sold to the complainant by the accused No.1. Section 406 of IPC states with regard to the punishment for criminal breach of trust. Criminal breach of trust has been explained in Section 405 of IPC. The opening portion of Section 405 of IPC states about "being in any manner entrusted with property, or with any dominion over property." In the instant case, the petitioner has neither been entrusted over the property nor had dominion over the property. As stated hereinabove, the allegation against the

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petitioner is that he had purchased the property, which was earlier purchased by the complainant. Under such circumstances, in the considered opinion of this Court, the offence punishable under Section 406 of IPC may not alleged against the present petitioner.

11. The charges for the offences punishable under Section 420 of IPC is with regard to a person cheating and thereby dishonestly induced the person to deliver any property to any person or making alter or destroy whole or any part of the valuable property and which is capable of being converted into a valuable security. The crux of the said offence is dishonestly inducing the person to deliver any property. Reading of the complaint and the allegations levelled therein does not reveal that the petitioner having dishonestly induced the complainant and for that matter any other person to deliver any property to any person etc.

12. That as mentioned in the complaint itself, the allegations against the petitioner being that he had not taken due diligence before purchasing the property in question from the accused No.1. In the considered opinion of this Court, any person being vigilant enough and not taking due diligence etc. cannot automatically lead to a presumption that the petitioner had committed an offence of cheating or committing an offence of criminal breach of trust.

13. Before appreciating the submissions of learned Advocate, it would be profitable to refer to para 102 of the judgment of Supreme Court in the case of State of Haryana (Supra), which reads as under:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any

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court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulate and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised:

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fides and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and

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with a view to spite him due to private and personal grudge."

14. The Supreme Court has laid down categories of cases where the power could be exercised by this Court under Section 482 of Code of Criminal Procedure either to prevent abuse of the process of any Court or otherwise to secure the ends of justice. Bare perusal of the impugned complaint reveals that while the offences alleged are punishable under Sections 406, 420 and 114 of IPC, yet specific allegation against the petitioner being that he did not verify the title of the property before purchasing the same from the accused No.1 and thereby committed an offence breach of trust and cheating. Thus, the issue which needs to be answered by this Court in two folds being that whether an act of the petitioner of not verifying the title of the property be an offence punishable under Section 406, 420 and 114 of IPC.

15. Section 406 states regarding punishment for criminal breach of trust and criminal breach of trust has been explained in Section 405 of IPC. On the other hand, Section 420 states regarding punishment for cheating and cheating has been defined under Section 415 of IPC.

16. The Supreme Court in the case Palanitkar versus State of Bihar reported in 2002 (1) SCC 241 has elaborately discussed the ingredients of criminal breach of trust and ingredients of offence of cheating. The observations of the Supreme Court are at paras 8,9, 10, 11, 12 and 13 are reproduced herein below:

"8. Before examining respective contentions on their relative merits, we think it is appropriate to notice the legal position. Every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court but a breach of trust with mens rea gives rise to a criminal prosecution as well.

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9. The ingredients in order to constitute a criminal breach of trust are: (1) entrusting a person with property or with any dominion over property (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or

(b) dishonestly using or disposing of that property or willfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged (ii) of any legal contract made touching the discharge of such trust.

10. The ingredients of the offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii) (a) the person so deceived should be induced to deliver any property to any person, 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; and

(iii) in cases covered by (ii) (b), the act of omission should be one which causes or is likely to cause damage or harm .to the person induced in body, mind, reputation or property.

11. One of us (D.P. Mohapatra J.) speaking for the Bench, in Hridaya Ranjan Prasad Verma & Ors. v. State of Bihar & Anr, [2000] 4 SCC 168, on facts of that case, has expressed thus :

"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 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."

[emphasis supplied]

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12. Finding that ingredients of the offence of cheating and its allied offences had not been made out, this Court interfered with the order of the High Court and quashed the criminal proceedings.

13. In G.V. Rao v. L.H.V. Prasad & Ors., [2000] 3 SCC 693, this Court in para 7 has stated thus :-

"As mentioned above, 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 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 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"

17. Now, appreciating the allegations against the present applicant in context of the ingredients required for constituting of the offence under criminal breach of trust, it becomes clear that in the instant case, there is no entrustment of property or dominion over the property and that the person entrustment dishonestly and dis-appropriately converting the said property for his own use and has dishonestly dispute of the said property to reiterate the allegation against the present petitioner being that by purchasing which had been sold by the original owner i.e. accused No.1 to the complainant itself committing criminal breach of trust.

18. As regards the offence of cheating alleged against the petitioner, in

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the instant case, there is no fraudulent or dishonest inducement of a person induced to deliver any property to any person again the same is not the case here.

19. As regards the offence of abetment, the petitioner is alleged to have abetted accused No.1 in committing the offences under Section 406 and 420 of IPC and whereas again this Court does not find that there is material to support the allegation that the present petitioner had acted in connivance with the accused No.1. As a matter of fact, present petitioner has vide cancellation deed dated 10.06.2011 cancelled the sale transaction dated 12.05.2010, upon coming to know about the fact that the property had already been sold to the complainant even before the sale in favour of the petitioner herein.

21. In view of the discussion hereinabove, this Court is of the considered opinion that this case clearly falls under the category laid down by the Supreme Court in the case of Bhajanlal (Supra) inasmuch as the allegations made in the FIR. Even they are taken at face value and had accepted, any issue did not prima facie constitute any offence and make out the case against the petitioner.

22. In view of conclusion arrived at hereinabove, present petition succeeds. The impugned complaint being C.R. I No.18 of 2015 registered with Viramgam Police Station, Dist. Ahmedbad Rural, for the offences punishable under Section 406, 420 and 114 of the Indian Penal Code, is hereby quashed in so far as present petitioner is concerned. Rule is made absolute.

(NIKHIL S. KARIEL,J) Y.N. VYAS