[Cites 12, Cited by 0]

Jharkhand High Court

Rajesh Ram @ Rajesh Mahto vs The State Of Jharkhand on 9 December, 2025

Author: Anil Kumar Choudhary

Bench: Anil Kumar Choudhary

                                                       ( 2025:JHHC:37108 )




      IN THE HIGH COURT OF JHARKHAND AT RANCHI
                           Cr.M.P. No.521 of 2020
                                       ------

Rajesh Ram @ Rajesh Mahto, aged about 36 years, S/o Sri Mahendra Mahto, R/o Village-Karra Road, Mahto Toli, P.O. + P.S.-Khunti, Dist.-Khunti, Jharkhand.

                                                       ...             Petitioner
                                            Versus
            1. The State of Jharkhand

2. Manoj Kumar, S/o Sittu Nath Ram, R/o Vill-Bagru, P.O. + P.S.- Khunti, Dist-Khunti, Jharkhand.

                                                       ...           Opposite Parties
                                             ------
             For the Petitioner        : Mr. Abhishek Kr. Dubey, Advocate
                                       : Mr. Atif Anwar, Advocate
                                       : Ms. Akriti Aprajita, Advocate
                                       : Mr. Harsh Utsav, Advocate
             For the State             : Mr. Shiv Shankar Kumar, Addl.P.P.

                                             ------
                                        PRESENT
                 HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY


By the Court:-    Heard the parties.

2. Though, notice has validly been served upon the opposite party

no.2, but no one turns up on behalf of the opposite party no.2 in spite of

repeated calls.

3. This Criminal Miscellaneous Petition has been filed invoking the

jurisdiction of this Court under Section 482 of the Code of Criminal

Procedure with the prayer to quash and set aside the entire criminal

proceeding arising out of C.P. Case No.09 of 2018 including the order

dated 05.09.2018 passed by learned Chief Judicial Magistrate, Khunti

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whereby and where under the learned Chief Judicial Magistrate, Khunti

has taken cognizance for the offences punishable under Sections

420/406/506 of the Indian Penal Code against the petitioner.

4. The brief facts of the case is that the petitioner took Rs.7 lakhs on

loan from the complainant but did not repay Rs.1,96,000/- out of the said

loan amount and when the complainant demanded the said money, the

petitioner threatened him.

5. On the basis of the complaint, statement on solemn affirmation of

the complainant and the statement of the enquiry witnesses, the learned

Chief Judicial Magistrate, Khunti has found prima facie case for the

offences punishable under Sections 420/406/506 of the Indian Penal Code

against the petitioner.

6. Learned counsel for the petitioner submits that charge has not yet

been framed in this case and trial is yet to begin.

7. Learned counsel for the petitioner relies upon the judgment of this

Court in the case of Phudan Murmu vs. The State of Jharkhand &

Another dated 21.06.2024 in Cr.M.P. No.2601 of 2022 and submits that in

that case, this Court has relied upon the judgment of the Hon'ble Supreme

Court of India in the case of Satish Chandra Ratan Lal Shah vs. State of

Gujarat & Anr. reported in (2019) 9 SCC 148, paragraph nos.11 and 13 of

which reads as under:-

"11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with Section 406 IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that

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Respondent 2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognises a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment." (Emphasis supplied)"

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." (Emphasis supplied)

Wherein the Hon'ble Supreme Court of India has reiterated the

settled principle of law that a mere breach of promise, agreement or

contract does not, ipso facto, constitute the offence of criminal breach of

trust; the punishment for which has been provided under Section 405 of

the Indian Penal Code, without there being a clear case of entrustment

and further went on to hold that 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 between the parties.

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8. Learned counsel for the petitioner next submits that in the absence

of any allegation that any alarm was caused to the complainant, the

offence of criminal intimidation punishable under Section 506 of the

Indian Penal Code is also not made out, hence, the prayer as prayed for in

this Cr.M.P., be allowed.

9. Learned Addl.P.P. appearing for the State on the other hand

vehemently opposes the prayer of the petitioner made in the instant

Cr.M.P and submits that even if the allegations against the petitioner are

considered to be true in their entirety then the offences in respect of which

prima facie case has been found out by the learned Chief Judicial

Magistrate, Khunti is in fact made out against the petitioner. Therefore, it

is submitted that this Cr.M.P., being without any merit, be dismissed.

10. Having heard the rival submissions made at the Bar and after

carefully going through the materials available in the record, it is

pertinent to mention here that it is a settled principle of law that mere

inability of an accused person to return the loan amount 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 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-6 of which reads as

under:-

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6. "Xxxx xxxx xxxx 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. Now, coming to the facts of the case, the admitted case of the

complainant is that substantial amount of the loan taken by the petitioner

has been paid back and there is no allegation against the petitioner of

playing deception since the beginning of the transaction between the

parties.

12. Under such circumstances, this Court is of the considered view that

even if the entire allegations against the petitioner are considered to be

true in their entirety, still the offence punishable under Section 420 of

Indian Penal Code is not made out.

13. So far as the offence punishable under Section 406 of the Indian

Penal Code is concerned, the essential ingredients to constitute the said

offence is that there must be an entrustment and there must be

misappropriation or conversion of any property to his own use or

dishonestly used or disposed of the entrusted property in violation of any

legal direction or of any legal contract as has been reiterated by the

Hon'ble Supreme Court of India in the case of Ram Narayan Popli vs.

CBI reported in (2003) 3 SCC 641.

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14. Now coming to facts of the case, the only allegation against the

petitioner is that the petitioner taken a loan. The loan taken by a party

cannot be said to be an entrustment and there is no allegation of any

dishonest misappropriation of any entrusted property either, hence, in the

considered opinion of this Court; even if the entire allegations made

against the petitioner are considered to be true in their entirety, still the

offence punishable under Section 406 of the Indian Penal Code is not

made out.

15. So far as the offence punishable under Section 506 of the Indian

Penal Code is concerned, the only allegation against the petitioner is that

the petitioner threatened the complainant to kill and refused to pay back

the loan amount taken by him.

16. The Hon'ble Supreme Court of India in the case of Vikram Johar

vs. State of Uttar Pradesh & Anr. reported in (2019) 14 SCC 207,

paragraph no.25 of which reads as under :-

25. Now, reverting back to Section 506, which is offence of criminal intimidation, the principles laid down by Fiona Shrikhande [Fiona Shrikhande v. State of Maharashtra, (2013) 14 SCC 44 : (2014) 1 SCC (Cri) 715] has also to be applied when question of finding out as to whether the ingredients of offence are made or not. Here, the only allegation is that the appellant abused the complainant. For proving an offence under Section 506 IPC, what are the ingredients which have to be proved by the prosecution? Ratanlal & Dhirajlal on Law of Crimes, 27th Edn. with regard to proof of offence states the following:

"... The prosecution must prove:

(i) That the accused threatened some person.

(ii) That such threat consisted of some injury to his person, reputation or property; or to the person, reputation or property of someone in whom he was interested;

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(iii) That he did so with intent to cause alarm to that person; or to cause that person to do any act which he was not legally bound to do, or omit to do any act which he was legally entitled to do as a means of avoiding the execution of such threat.