Jharkhand High Court
Srei Equipment Finance Limited vs The State Of Jharkhand on 30 June, 2021
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. M.P. No. 45 of 2019
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1. SREI Equipment Finance Limited, through its authorized representative
Mr. Satyajit Mukherjee
2. Hemant Kanoria @ Hemant Kanojia
3. Sunil Kanoria @ Sunil ... Petitioners
-versus-
1. The State of Jharkhand
2. Krishna Kumar ... Opposite Parties
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CORAM : HON'BLE MR. JUSTICE ANANDA SEN
THROUGH VIDEO CONFERENCING
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For the Petitioner : Mr. Bharat Kumar, Advocate
For the State: A.P.P.
For the O.P. No.2 : Mr. Mukesh Kumar Dubey, Advocate
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ORDER
RESERVED ON 08.02.2021 PRONOUNCED ON 30.06.2021
4/ 30.06.2021 In this criminal miscellaneous petition, the petitioner has
challenged the order dated 07.04.2018 passed by the Chief Judicial
Magistrate, Jamshedpur in C/1 Case No.2941 of 2016 by which after taking
cognizance of the offence under Sections 406/420/120B of the Indian Penal
Code, petitioners have been summoned.
2. The opposite party No.2 filed a complaint petition arraying the
petitioners as accused in the Court of Chief Judicial Magistrate at Jamshedpur,
which was registered as C/1 Case No.2941 of 2016. It is alleged that on being
approached by the petitioners No.2 and 3, on behalf of the petitioner No.1 the
complainant purchased six numbers of LPK2518 tipper (Hywa), which was
under loan agreement with JMT Enterprises, through Hire Purchase
Agreement, after paying total consideration amount of Rs.1,00,00,000/-
(Rupees One Crore) to the petitioners company. The said Hywa vehicles bore
registration numbers as WB 37C 3180, WB 37C 3181, WB 37C 3182, WB 37C
3197, WB 37C 3198 and WB 37C 3199. It is alleged that 50% of the
consideration amount was adjusted from the loan account of the petitioners. At
the time of purchase, the petitioners had assured the complainant that they will
provide N.O.C and all the vehicles will be transferred in the name of the
complainant from JMT Enterprises. The petitioners, though issued N.O.C.,
could not transfer the above vehicles in the name of the complainant. It is
alleged that, one of the vehicle amongst the said vehicles, bearing registration
No. WB 37C 3197, met with an accident on 7th June, 2013, resultantly the
vehicle was badly damaged and the same was also reported to the local
police. The vehicle was sent to the authorized service centre, which, declined
to hand over the vehicle to the complainant and is still lying with the service
centre, due to which the complainant incurred and still incurring huge loss for
non-utilisation of the said vehicle for its business purpose. It is alleged that the
complainant requested the petitioners on several occasions to take steps for
change of owner's name, but the petitioners did not take any step till now and
have declined to take any step. The complainant came to know that the
petitioners have sold the said vehicles without the consent of the previous
owner, J.M.T. Enterprises, with false assurance that owner name will be
changed. It is alleged that the petitioners, under conspiracy, fraudulently took
the amount of Rs.one crore from the complainant by cheating causing huge
monetary loss to the complainant.
3. Counsel for the petitioners submits that the petitioners No.2 and 3
are the directors of petitioner No.1 and they are not involved in day to day
administration of the company. He submits that the complainant had full
knowledge about the repossession of the vehicles. He submits that as per
Section 51(5), fresh certificate of registration can be issued even in the
absence of consent of the previous owner at the instance of the financer and
the petitioner No.1 has already provided NOC for the same. He submits that
the petitioners cannot be prosecuted for any criminal offence after giving NOC
for transfer of registration and inability of the complainant for getting it
transferred. He submits that present case has been initiated after a lapse of
more than 3 years of delivery of the assets only to avoid payment of legitimate
dues to the company. He submits that there has been no dishonest
misappropriation on the part of the petitioners as the vehicle as well as NOC
as per the statute has been handed over to the complainant. He submits that
there is no dishonest inducement on the part of the petitioners and there is no
wrongful gain or corresponding loss to the complainant. Thus, no offence
under Section 406/420 of the Indian Penal Code is made out against the
petitioners.
4. Counsel for the opposite party No.2 submits that the criminal
offence is made out, which would be apparent from the perusal of the
complaint itself. He submits that when an offence is made out, the order taking
cognizance cannot be quashed. He submits that what the petitioners have
stated in this application is by way of their defence and their defence cannot
be looked at this stage.
5. I have heard the counsel for the parties and have gone through
the records.
6. The sum and substance of the complaint has been mentioned in
paragraph 2. From the complaint I find that the complainant obtained 6 Hywa
Vehicles with the assistance of the accused persons on the basis of hire
purchase agreement. It is the allegation that the accused assured that they will
obtain No Objection Certificate in respect of the vehicles and the vehicles will
be transferred in the name of the complainant. It is also admitted fact that No
Objection Certificate was issued, but the name could not be transferred. In the
meantime, one of the hywa vehicles met with an accident, but, as the owner's
name was not transferred, the service agency declined to hand over the
vehicle to the complainant. It is alleged that a false assurance was given that
the vehicle will be transferred in the name of the complainant. It is admitted
that the No Objection Certificate was handed over, but the name could not be
transferred. Registration of vehicle is transferred only by the District Transport
Officer. It is the District Transport Officer under the Motor Vehicles Act, who
records the change of ownership. In the instant case, it is an admitted case
that the petitioners have issued No Objection Certificate for the said transfer,
but for the reasons best known, the ownership of the vehicle was not
transferred and in the meantime, the vehicle met with an accident. It is the
case of the complainant that since the vehicle met with an accident and still
lying in service centre and not being handed over to the complainant, he is
suffering loss. It was also the duty of the complainant to ply the vehicle only
after getting the registration transferred in his name. Without registering the
vehicle in his name, he got the vehicle plied on road and accident had
occurred.
7. The instant complaint has been registered under Section 420, 406
of the Indian Penal Code. Section 406 of the Indian Penal Code is the
provision prescribing punishment for criminal breach of trust. Criminal breach
of trust has been defined under Section 405 of the Indian Penal Code, which
reads as under: -
405. Criminal breach of trust. - Whoever, being
in any manner entrusted with property, or with
any dominion over property, dishonestly
misappropriates or converts to his own use that
property, or dishonestly uses or disposes of that
property in violation of any direction of law
prescribing the mode in which such trust is to be
discharged, or of any legal contract, express or
implied, which he has made touching the
discharge of such trust, or willfully suffers any
other person so to do, commits "criminal breach
of trust"
8. Another Section of the Indian Penal Code under which allegation has
been made in the complaint is Section 420 of the Indian Penal Code. Section
420 of the Indian Penal Code is the punishment for cheating. Cheating is
defined in Section 415 of the Indian Penal Code. Section 415 is quoted
hereinbelow: -
415. Cheating - 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, 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".
9. The requirement of Section 415 IPC has been set forth in
paragraph 41 of the judgment rendered by the Hon'ble Supreme Court in the
case of Inder Mohan Goswami & Another versus State of Uttaranchal &
Others reported in (2007) 12 SCC 1. Paragraph 41 reads as under: -
41. Section 415 IPC thus 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.
10. The Hon'ble Supreme Court, in the aforesaid judgment, in
paragraph 42, has analysed as to what are the separate classes of the acts,
which would attract the aforesaid provision of the law. It is necessary to quote
paragraph 42 of the aforesaid judgment rendered by the Hon'ble Supreme
Court in the case of Inder Mohan Goswami (supra):-
42. On a reading of the aforesaid section, it is
manifest that in the definition there are two
separate classes of acts which the person
deceived may be induced to do. In the first class
of acts he may be induced fraudulently or
dishonestly to deliver property to any person.
The second class of acts 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.
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 need
not be fraudulent or dishonest. 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 a fraudulent or dishonest
intention at the time of making the promise.
From his mere failure to subsequently keep a
promise, one cannot presume that he all along
had a culpable intention to break the promise
from the beginning.
11. To attract the ingredients of offence of cheating, there should be
an element of inducement by fraud or dishonesty to deliver a property. In this
case I find that there was no such inducement, rather it is a transaction of
obtaining hywa vehicles on hire purchase. The petitioners had granted No
Objection Certificate. This cannot attract the ingredients of offence of cheating
punishable under Section 420 of the Indian Penal Code.
12. From the perusal of the aforesaid provision, I find that there has to
be a dishonest or fraudulent intention from the very inception of the
transaction. Further, some property has to be intentionally, dishonestly
retained or a person has to be induced to do or omit to do, which he would not
have done or omitted to have done, if he were not so deceived. Elements of
deception should be there in the entire transaction. Said element of deception
should have been from the initial stage. The Hon'ble Supreme Court, in the
case of S.W. Palanitkar & Others versus State of Bihar and Another
reported in (2002) 1 SCC 241, has held that fraudulent or dishonest intention
must be shown to exist at the time of making of the inducement, otherwise,
mere failure to keep up promise subsequently, cannot be presumed as an act
leading to cheating.
13. In this case, considering the allegations, if the same are matched
with the provisions of law, neither the provisions of Section 406 of the Indian
Penal Code nor of Section 420 of the Indian Penal Code are attracted.
14. In this case, I find from the complaint that the allegations in this
case revolve around obtaining hywa vehicles on hire purchase and non-
transfer of ownership with respect to the hywa vehicles. This allegation, in no
way, makes out any criminal offence.
15. Since no offence is made out from the allegations, I am inclined to
allow this criminal miscellaneous petition. The order dated 07.04.2018 passed
by the Chief Judicial Magistrate, Jamshedpur as also the entire proceeding in
C/1 Case No.2941 of 2016 is hereby quashed and set aside.
16. This criminal miscellaneous petition is, accordingly, allowed.
(Ananda Sen, J.)
Kumar/Cp-03
