Jharkhand High Court
Vikash Kumar Gaddhyan @ Vikash Gaddhyan vs State Of Jharkhand on 12 June, 2024
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 1690 of 2022
1. Vikash Kumar Gaddhyan @ Vikash Gaddhyan, aged about 45 years,
Son of Basudeo Gaddhyan, Managing Director of M/s City Alloys
Private Limited having its registered office at Hanuman Charai, P.O. -
Barakar, P.S. -Barakar, District -West Bardhaman, West Bengal.
2. Narendra Gopal Singhal, aged about 34 years, son of Bajrang Lal
Singhal, Director of M/s City Alloys Private Limited having its
registered office at Hanuman Charai, P.O. -Barakar, P.S. -Barakar,
District -West Bardhaman, West Bengal
.... Petitioners
Versus
1. State of Jharkhand
2. M/s Hari Om & Company having its factory at B-2, Industrial
Estate, Adityapur, P.O. and P.S. -Adityapur, Town -Jamshedpur,
District -Seraikella -Kharsawan, represented through its sole
Proprietor Shri Ajay Kumar, son of Late Raj Jee Shaw.
.... Opp. Parties
PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
.....
For the Petitioner : Mr. Jitendra Kr. Pasari, Advocate
For the State : Mr. P.K. Chatterjee, Spl. P.P.
For the O.P. No.2 : Mr. Indrajit Sinha, Advocate
: Mr. Sagar Kumar, Advocate
.....
By the Court:-
1. Heard the parties.
2. This criminal miscellaneous petition has been filed invoking the
jurisdiction of this Court under Section 482 Cr.P.C. with a prayer to
quash the entire criminal proceeding including the order taking
cognizance dated 02.03.2022 in Complaint Case No. 784 of 2021,
passed by the learned Judicial Magistrate -1st Class, Jamshedpur
whereby and where under the learned Magistrate has taken
cognizance of the offences punishable under Section 420/34 of the
Indian Penal Code.
3. The brief fact of the case is that the complainant supplied scrap to
the petitioners in respect of three separate purchase orders. The
petitioners paid Rs.20,00,000/- though the total scrap supplied was
of Rs.90,00,000/-. The complainant-opposite party no.2 filed the
complaint case. On the basis of the averments made in the complaint,
statement on solemn affirmation of the complainant and the
statement of the inquiry witnesses, the learned Judicial Magistrate -
1st Class, Jamshedpur found that prima facie case is made out for the
offences punishable under Section 420/34 of the Indian Penal Code.
4. It is submitted by the learned counsel for the petitioners that the
allegations made against the petitioners are out and out false. The
complainant did not took back the admittedly inferior quality steel
scrap supplied by him and the petitioners have disposed of the said
inferior quality iron scrap and debited the same from the account of
the complainant in the ledger by inserting less value of the said iron
scrap. It is next submitted that there is no allegation against the
petitioners that they had any intention to deceive the complainant
since the beginning of the transaction between the parties. It is then
submitted by the learned counsel for the petitioners that the dispute
between the parties is at best a business dispute but by no stretch of
imagination, it can be said that the ingredients of the offences
punishable under Section 420 of the Indian Penal Code is made out.
5. Relying upon the Judgment of Hon'ble Supreme Court of India in
the case of Hridaya Ranjan Prasad Verma and Others Vs. State of
Bihar and Another, reported in (2000) 2 BLJR 1623, para -15 of
which reads as under:-
"15. 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)
It is submitted by the learned counsel for the petitioners that 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 and as there is no such allegation
against the petitioner, so the offence punishable under Section 420 of
the Indian Penal Code is not made out.
6. The learned counsel for the petitioners next relied upon the
Judgment of Hon'ble Supreme Court of India in the case of S.W.
Palanitkar & Ors. Vs. State of Bihar & Ors., reported in 2002 (1)
Crimes 146 (SC) wherein the Hon'ble Supreme Court of India also
relied upon its said Judgment passed in the case of Hridaya Ranjan
Prasad Verma and Others Vs. State of Bihar and Another (supra).
7. The learned counsel for the petitioners next relied upon the
Judgment of Hon'ble Supreme Court of India in the case of Vesa
Holdings Private Limited and Another Vs. State of Kerala and
Others, reported in (2015) 8 SCC 293, para -12 of which reads as
under:-
"12. From the decisions cited by the appellant, the settled
proposition of law is that every breach of contract would not give
rise to an offence of cheating and only in those cases breach of
contract would amount to cheating where there was any deception
played at the very inception. If the intention to cheat has developed
later on, the same cannot amount to cheating. In other words for
the purpose of constituting an offence of cheating, the complainant
is required to show that the accused had fraudulent or dishonest
intention at the time of making promise or representation. Even in
a case where allegations are made in regard to failure on the part of
the accused to keep his promise, in the absence of a culpable
intention at the time of making initial promise being absent, no
offence under Section 420 of the Penal Code, 1860 can be said to
have been made out." (Emphasis supplied)
And submits that it is a settled principle of law that if the intention
to cheat has developed later on, the same cannot amount to cheating.
Hence, it is submitted that even though the entire allegations made
against the petitioners are considered to be true, still the offence
punishable under Section 420 of the Indian Penal Code is not made
out. Hence it is submitted that the entire criminal proceeding
including the order taking cognizance dated 02.03.2022 in Complaint
Case No. 784 of 2021, passed by the learned Judicial Magistrate -1st
Class, Jamshedpur whereby and where under the learned Magistrate
has taken cognizance for the offences punishable under Section
420/34 of the Indian Penal Code be quashed and set aside.
8. The learned Spl. P.P. and the learned counsel for the opposite party
no.2 on the other hand vehemently opposes the prayer for quashing
the entire criminal proceeding including the order taking cognizance
dated 02.03.2022 in Complaint Case No. 784 of 2021, passed by the
learned Judicial Magistrate -1st Class, Jamshedpur whereby and
where under the learned Magistrate has taken cognizance of the
offences punishable under Section 420/34 of the Indian Penal Code
and submits that the allegations made in the complaint, statement on
solemn affirmation of the complainant as well as statement of the
inquiry witnesses goes to show that the petitioners had the intention
of cheating the complainant since the very beginning of the
transaction between the parties.
9. Learned counsel for the opposite party no.2, relying upon the
Judgment of Hon'ble Supreme Court of India in the case of Priti
Saraf Vs. State of NCT of Delhi, reported in AIR 2021 SC 1531,
para-32 of which reads as under:-
"32. In the instant case, on a careful reading of the
complaint/FIR/charge-sheet, in our view, it cannot be said that the
complaint does not disclose the commission of an offence. The
ingredients of the offences under Sections 406 and 420 IPC cannot
be said to be absent on the basis of the allegations in the
complaint/FIR/charge-sheet. We would like to add that whether the
allegations in the complaint are otherwise correct or not, has to be
decided on the basis of the evidence to be led during the course of
trial. Simply because there is a remedy provided for breach of
contract or arbitral proceedings initiated at the instance of the
appellants, that does not by itself clothe the court to come to a
conclusion that civil remedy is the only remedy, and the initiation
of criminal proceedings, in any manner, will be an abuse of the
process of the court for exercising inherent powers of the High
Court under Section 482 CrPC for quashing such proceedings."
submits that the allegations in the complaint are correct or not has
to be decided on the basis of the evidence to be led during the course
of the trial and simply because there is a remedy provided for breach
of contract or arbitral proceedings initiated at the instant of the
appellant that does not by itself clothe the court to come to a
conclusion that civil remedy is the only remedy. Hence, it is
submitted that this criminal miscellaneous petition being without
any merit be dismissed.
10. Having heard the submissions made at the Bar and after going
through the materials in the record, it is pertinent to mention here
that there is absolutely no allegation against the petitioners that they
had any intention to deceive the complainant at the time of entering
into transaction between the parties. True it is that the veracity of the
allegations made in the complaint can only be tested in a full dressed
trial but here, it is a case where there is not even any allegation
regarding the essential ingredients to constitute the offence
punishable under Section 420 of the Indian Penal Code that the
accused must have the intention of deceiving since the beginning of
the transaction between the parties. Admittedly, the petitioners have
paid Rs.20,00,000/- and admittedly some of the articles supplied by
the complainant was of inferior quality.
11. Under such circumstances, this Court is of the considered view that
even if the entire allegations made against the petitioners are
considered to be true in their entirety, still the offence punishable
under Section 420 of the Indian Penal Code is not made out; in the
absence of any allegation that the petitioner had the intention to
deceive since the beginning of the transaction between the parties
and in the absence of the same, continuation of this criminal
proceeding will amount to abuse of process of law. Therefore, this is
a fit case where the entire criminal proceeding including the order
taking cognizance dated 02.03.2022 in Complaint Case No. 784 of
2021, passed by the learned Judicial Magistrate -1st Class,
Jamshedpur whereby and where under the learned Magistrate has
taken cognizance of the offences punishable under Section 420/34 of
the Indian Penal Code be quashed and set aside qua the petitioners.
12. Accordingly, the entire criminal proceeding including the order
taking cognizance dated 02.03.2022 in Complaint Case No. 784 of
2021, passed by the learned Judicial Magistrate -1st Class,
Jamshedpur whereby and where under the learned Magistrate has
taken cognizance for the offences punishable under Section 420/34
of the Indian Penal Code is quashed and set aside qua the
petitioners.
13. In the result, this criminal miscellaneous petition is allowed.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
Dated the 12th June, 2024
AFR/Sonu-Gunjan/-
