Jharkhand High Court
Sri Dhirendra Agarwal @ Dhirendra vs The State Of Jharkhand on 6 May, 2024
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 2238 of 2023
1. Sri Dhirendra Agarwal @ Dhirendra, aged about 50 years, son of
Jagdish Chand Agarwal
2. Sri Manish Agarwal @ Manish, aged about 22 years, son of Sri
Dhirendra Agarwal
both resident of Jawahar Colony, Plot No.111, Gali No.21, P.O. &
P.S.- Faridabad, Dist.-Faridabad (Haryana)-PIN-121005
.... Petitioner
Versus
1. The State of Jharkhand
2. Sri Anil Kumar Agarwal, aged about 45 years, son of Deoraj
Agarwal, resident of Near Pranjiwan Road, Old Bazar, P.O.-
Dhanbad, P.S.-Dhansar, Dist.-Dhanbad (Jharkhand)
.... Opp. Party
PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
.....
For the Petitioners : Mr. S.K. Laik, Advocate
For the State : Mr. B.N. Ojha, Spl. P.P.
For O.P. No.2 : Mr. Shailesh Kr. Singh, Advocate
: Mr. A.K. Singh, 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 dated
25.03.2023 passed by the learned Judicial Magistrate 1st Class,
Dhanbad in connection with Complaint Case No.6345 of 2022
whereby and where under, the learned Judicial Magistrate 1st Class,
Dhanbad has taken cognizance for the offence punishable under
Section 420, 406 and 120B of Indian Penal Code.
3. The brief fact of the case is that the complainant supplied hard coke
to the petitioners upon the petitioners promising to make the
payment within fifteen days. The petitioners were to pay
Rs.6,71,684/- but they did not pay the remaining amount of
Rs.3,98,418/- hence, alleging that the petitioners has committed
cheating and criminal breach of trust, a complaint was filed.
4. Learned counsel for the petitioners relying upon the judgment of
this Court in the case of Mukesh Kumar Sharma vs. The State of
Jharkhand reported in 2023 (3) JLJR 546 submits that in that case,
relying upon the judgment of the Hon'ble Supreme Court of India in
the case of Dalip Kaur & Ors. vs. Jagnar Singh & Anr. reported in
(2009) 14 SCC 696, paragraph no.10 of which reads as under:-
"10. The High Court, therefore, should have posed a
question as to whether any act of inducement on the
part of the appellant has been raised by the second
respondent and whether the appellant had an
intention to cheat him from the very inception. If the
dispute between the parties was essentially a civil
dispute resulting from a breach of contract on the
part of the appellants by nonrefunding the amount
of advance the same would not constitute an offence
of cheating. Similar is the legal position in respect of
an offence of criminal breach of trust having regard
to its definition contained in Section 405 of the
Penal Code. (See Ajay Mitra v. State of M.P.
[(2003) 3 SCC 11 : 2003 SCC (Cri) 703])"
(Emphasis supplied)
This Court considered that the intention to cheat since the very
inception is a sine-qua-non to constitute the offence punishable under
Section 420 of Indian Penal Code and in the absence of the same, the
offence punishable under Section 420 of Indian Penal Code is not
made out.
5. Learned counsel for the petitioners next relied upon the judgment
of this Court in the case of Md. Nazimuddin vs. The State of
Jharkhand reported in 2023 (3) JLJR 288, wherein this Court relied
upon the judgment of Hon'ble Supreme Court of India in the case of
Vesa Holding Private Limited & Anr. vs. State of Kerela & Ors.
reported in (2015) 8 SCC 293, paragraph no. 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."
wherein the Hon'ble Supreme Court of India has held that 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.
6. Hence, it is submitted that as no offence is made out against the
petitioners even if the entire allegation made in the complaint,
statement of the complaint on solemn affirmation and the statement
of the inquiry witnesses are considered to be true in their entirety,
the entire criminal proceeding including the order dated 25.03.2023
passed by the learned Judicial Magistrate 1st Class, Dhanbad in
connection with Complaint Case No.6345 of 2022 be quashed and set
aside.
7. Learned Special Public Prosecutor and the learned counsel for the
opposite party no.2 on the other hand opposes the prayer. It is next
submitted by the learned counsel for the opposite party no.2 that the
fraudulent and dishonest intention of the petitioners are apparent
from the fact that during the subsistence of business relationship
they did not raise any objection regarding the supply of inferior
quality of coal but on receipt of the legal notice sent by the opposite
party no.2, the petitioners have taken an amateurish plea regarding
supply of poor quality of coal worth of Rs.1,00,000/-. It is next
submitted by the learned counsel for the opposite party no.2 relying
upon the judgment of the Hon'ble Supreme Court of India in the
case of Priti Saraf vs. State of NCT of Delhi reported in 2021 (2)
Eastern India Criminal Cases 59 SC that simply because there is
remedy provided for breach of contract or arbitral proceedings does
not itself clothe the court to come to the conclusion that civil remedy
is the only remedy and initiation of criminal proceeding will be an
abuse of process of court.
8. Learned counsel for the opposite party no.2 next relied upon the
judgment of Hon'ble Supreme Court of India in the case of
Mosiruddin Munshi vs. Mohd. Siraj & Anr. reported in (2014) 14
SCC 29 wherein the Hon'ble Supreme Court of India has observed
that when the averment made in the complaint reveals that
dishonest and fraudulent inducement by the accused, the High
Court should not step in and stall the investigation by declaring that
it was a civil transaction wherein no semblance of criminal offences
involved.
9. In support of his contention that it is a settled principle of law that
there may be facts which may give rise to a civil claim and also
amounts to an offence, therefore, merely because a civil claim is
maintainable does not mean that criminal complaint cannot be
maintained; the learned counsel for the opposite party no.2 relies
upon the judgment of Hon'ble Supreme Court of India in the case of
Medchl Chemicals & Pharma (P) Limited vs. Biologist E. Ltd. &
Anr. reported in (2000) 3 SCC 269 and the case of Lalmuni Devi
(Smt) vs. State of Bihar & Ors. reported in (2001) 2 SCC 17. 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 it is a settled principle of law that in order to constitute the
offence punishable under Section 420 of Indian Penal Code, the
accused must have the intention to deceive the victim since the
beginning of the transaction between them as has been held by the
Hon'ble Supreme Court of India in the case of Uma Shankar
Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC
336, paragraph No.6 of which reads as under :-
6. Xxxxx It is well settled 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 the present case it has nowhere been
stated that at the very inception there was any
intention on behalf of the accused persons to cheat
which is a condition precedent for an offence under
Section 420 IPC." (Emphasis supplied)
11. It is also settled principle of law that to make out a case of criminal
breach of trust, it is not sufficient to show that money has been
retained by the appellants. It must also be shown that the appellants
dishonestly disposed of the same in some way or dishonestly
retained the same. The mere fact that the appellants did not pay the
money to the complainant does not amount to criminal breach of
trust as has been held by the Hon'ble Supreme Court of India in the
case of Binod Kumar & Others vs. State of Bihar & Another
reported in (2014) 10 SCC 663, paragraph-18 of which reads as under
:-
"18. In the present case, looking at the allegations in
the complaint on the face of it, we find that no
allegations are made attracting the ingredients of
Section 405 IPC. Likewise, there are no allegations
as to cheating or the dishonest intention of the
appellants in retaining the money in order to have
wrongful gain to themselves or causing wrongful
loss to the complainant. Excepting the bald
allegations that the appellants did not make payment
to the second respondent and that the appellants
utilised the amounts either by themselves or for
some other work, there is no iota of allegation as to
the dishonest intention in misappropriating the
property. To make out a case of criminal breach of
trust, it is not sufficient to show that money has
been retained by the appellants. It must also be
shown that the appellants dishonestly disposed of the
same in some way or dishonestly retained the same.
The mere fact that the appellants did not pay the
money to the complainant does not amount to
criminal breach of trust." Emphasis supplied)."
Emphasis supplied)
12. So far as the judgment relied upon by the learned counsel for the
opposite party no.2 are concerned, no doubt the same are settled
principles of law. True it is, that merely because a civil remedy is
available to a party if the facts constitute the offence punishable
under any penal provision of law then the criminal proceeding
cannot be quashed and is to be allowed to continue but the said as
already indicated above in this judgment itself, the law is well settled
that in order to maintain a criminal proceeding involving the offence
punishable under Section 420 of Indian Penal Code fraudulent and
dishonest inducement by the accused since the inception is a sine qua
non requirement.
13. Now coming to the facts of the case, admittedly, there was a long
standing business relationship between the parties. Admittedly, the
petitioners have paid part of the amount. The dispute between the
parties is that the petitioners says that the particular coke supplied
by the complainant was of substandard quality and the same is the
reason why the petitioners is not ready to pay entire amount in
respect of that; which contention of the petitioner of course, the
opposite party no.2-complaiant says is a fallacious one .
14. Under such facts of the case, this Court has no hesitation in holding
that even if the entire allegation made in the complaint are
considered to be true in their entirety, still in the absence of intention
to deceive the complainant by the petitioners- accused persons of the
case since the beginning of the transaction between the parties, the
offence punishable under Section 420 of Indian Penal Code is not
made out and in the absence of any allegation of dishonest
misappropriation of the property that is hard coke supplied to the
petitioners by the opposite party no.2-complainant, this Court is of
the considered view that the offence punishable under Section 406 of
Indian Penal Code is not made out.
15. Since this is a case where even if the entire allegation made in the
complaint, statement of the complainant on solemn affirmation and
the statement of the inquiry witnesses are considered to be true, still,
the offence for which the learned Magistrate has taken cognizance
i.e. the offence punishable under Sections 406, 420 and 120B of
Indian Penal Code are not made out.
16. Therefore, in the considered opinion of this Court, continuation of
the criminal proceeding will amount to abuse of process of law and
this is a fit case where the entire criminal proceeding including the
order dated 25.03.2023 passed by the learned Judicial Magistrate 1st
Class, Dhanbad in connection with Complaint Case No.6345 of 2022
be quashed and set aside.
17. Accordingly, the entire criminal proceeding including the order
dated 25.03.2023 passed by the learned Judicial Magistrate 1st Class,
Dhanbad in connection with Complaint Case No.6345 of 2022 is
quashed and set aside.
18. In the result, this criminal miscellaneous petition is allowed.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
Dated the 6th May, 2024
AFR/Sonu-Gunjan/-
