"a. Issue a Writ of Certiorari Quash the
complaint filed by the Respondent No.2 before
the Respondent No.1 police for the offences
punishable under Section 406 and 420 of
Indian Penal Penal Code dated 07.03.2024 vide
Annexure-A
b. Issue a Writ of Certiorari for quash the
First Investigation Report, filed by the
Respondent No. 1 in Cr No. 159/2024 against
the petitioners by the 1st Respondent Police for
offences punishable u/s. 406,420 of IPC on the
file of 4th Additional Chief Metropolitan Court at
Bengaluru dated 07.04.2024 vide Annexure-B
and all further actions initiated by the 1st
Respondent Police.
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c. Issue a Writ of Certiorari to quash all
other further proceedings in Charge Sheet No.
C.C No 24962/2024 on the file 4th Additional
Chief Metropolitan Court at Bengaluru vide
Annexure-C.
d. Issue any other order or direction as
this Hon'ble Court deems fit and proper under
the facts and circumstances of this case to
meet the ends of Justice.
2. Heard learned counsel for the petitioners and
learned HCGP for respondent No.1 and perused the material on
record.
3. A perusal of the material on record will indicate that
respondent No.2-defacto complainant filed the instant
complaint against the petitioners, who were managing catering
services during Lok Sabha Election, 2024. According to
respondent No.2, the petitioners are guilty of the offences
punishable under Sections 406 and 420 of IPC.
4. In the recent judgment of the Apex Court in the
case of Delhi Race Club (1940) Ltd. v. State of U.P.,
reported in (2024) 10 SCC 690, the Apex Court considered
the scope and ambit of Sections 406 and 420 of IPC and held
as under:
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"24. Where a jurisdiction is exercised on a
complaint petition filed in terms of Section 156(3) or
Section 200CrPC, the Magistrate is required to apply
his mind. The Penal Code does not contain any
provision for attaching vicarious liability on the part
of Appellants 2 and 3, respectively, herein who are
none other than office-bearers of Appellant 1
Company. When Appellant 1 is the Company and it is
alleged that the company has committed the offence
then there is no question of attributing vicarious
liability to the office-bearers of the Company so far
as the offence of cheating or criminal breach of trust
is concerned. The office-bearers could be arrayed as
accused only if direct allegations are levelled against
them. In other words, the complainant has to
demonstrate that he has been cheated on account of
criminal breach of trust or cheating or deception
practised by the office-bearers.
25. The Magistrate failed to pose unto himself
the correct question viz. as to whether the complaint
petition, even if given face value and taken to be
correct in its entirety, would lead to the conclusion
that Appellants 2 and 3 herein were personally liable
for any offence. Appellant 1 is a body corporate.
Vicarious liability of the office-bearers would arise
provided any provision exists in that behalf in the
statute. Statutes indisputably must contain provision
fixing such vicarious liabilities. Even for the said
purpose, it is obligatory on the part of the
complainant to make requisite allegations which
would attract the provisions constituting vicarious
liability.
26. In Legal Remembrancer v. Abani Kumar
Banerji [Legal Remembrancer v. Abani Kumar
Banerji, 1950 SCC OnLine Cal 49 : AIR 1950 Cal
437] , a Division Bench of the Calcutta High Court
speaking through K.C. Das Gupta, J. (as he then
was) held that a Magistrate is not bound to take
cognizance of an offence merely because a complaint
is filed before him. He is required to carefully apply
NC: 2025:KHC:7879
his mind to the contents of the complaint before
taking cognizance of any offence alleged therein. The
relevant observations read as under : (SCC OnLine
Cal)
"... As I read Section 190 of the Code
of Criminal Procedure and the subsequent
sections, it seems to me to be clear that a
Magistrate is not bound to take cognizance
of an offence, merely because a petition of
complaint is filed before him. Mr Mukherji's
argument is that a Magistrate cannot
possibly take any action with regard to a
petition of complaint, without applying his
mind to it, and taking cognizance of the
offence mentioned in the complaint
necessarily takes place, when the
Magistrate's mind is applied to the petition.
Consequently Mr Mukherji argues,
whenever a Magistrate takes the action,
say, of issuing search warrant or asking the
police to enquire and to investigate, he has
taken cognizance of the case. In my
judgment, this is putting a wrong
connotation on the words "taking
cognizance". What is "taking cognizance"
has not been defined in the Code of
Criminal Procedure, and I have no desire
now to attempt to define it. It seems to me
clear, however, that before it can be said
that any Magistrate has taken cognizance of
any offence under Section 190(1)(a) of the
Code of Criminal Procedure, he must not
only have applied his mind to the contents
of the petition, but he must have done so
for the purpose of proceeding in a particular
way as indicated in the subsequent
provisions of this Chapter --proceeding
under Section 200, and thereafter sending
it for enquiry and report under Section 202.
When the Magistrate applies his mind not
for the purpose of proceeding under the
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subsequent sections of this Chapter, but for
taking action of some other kind e.g.
ordering investigation under Section
156(3), or issuing a search warrant for the
purpose of the investigation, he cannot be
said to have taken cognizance of the
offence. My conclusion, therefore, is that
the learned Magistrate is wrong in thinking
that the Chief Presidency Magistrate was
bound to take cognizance of the case as
soon as the petition of complaint was filed."
(emphasis supplied)
27. The aforesaid observation of the Calcutta
High Court was referred to and relied upon with
approval by this Court in its decision in R.R.
Chari v. State of U.P. [R.R. Chari v. State of U.P.,
1951 SCC 250 : AIR 1951 SC 207]
28. In Tilak Nagar Industries Ltd. v. State of
A.P. [Tilak Nagar Industries Ltd. v. State of A.P.,
(2011) 15 SCC 571 : (2012) 4 SCC (Cri) 645] , this
Court held that the power under Section 156(3)CrPC
can be exercised by a Magistrate even before he
takes cognizance provided the complaint discloses
the commission of cognizable offences and if the
complaint does not disclose commission of
cognizable offences, such an order of the Magistrate
directing investigation is liable to be quashed. The
relevant observations read as under : (SCC p. 574,
paras 11-12)
"11. After considering the rival
submissions, we are of the view that the
contentions of Mr Luthra are correct in view
of Section 155(2) of the Code as explained
in Bhajan Lal [State of Haryana v. Bhajan
Lal, 1992 Supp (1) SCC 335 : 1992 SCC
(Cri) 426] . We are of the opinion that the
statutory safeguard which is given under
Section 155(2) of the Code must be strictly
followed, since they are conceived in public
NC: 2025:KHC:7879
interest and as a guarantee against
frivolous and vexatious investigation.
12. The order of the Magistrate dated
21-6-2010 does not disclose that he has
taken cognizance. However, power under
Section 156(3) can be exercised by the
Magistrate even before he takes cognizance
provided the complaint discloses the
commission of cognizable offence. Since in
the instant case the complaint does not do
so, the order of the Magistrate stated above
cannot be sustained in law and is
accordingly quashed."
29. The aforesaid decision was in context with
the power of the Magistrate to order police
investigation under Section 156(3)CrPC. What is
sought to be conveyed in the said decision is that
when the Magistrate orders police investigation
under Section 156(3)CrPC he does not take
cognizance upon the complaint. It is only upon
receipt of the police report that the Magistrate may
take cognizance. If at the stage of pre-cognizance,
the Magistrate is expected to be careful or to put it in
other words, the Magistrate is obliged to look into
the complaint threadbare so as to reach to a prima
facie conclusion whether the offence is disclosed or
not, then he is expected to be more careful when he
is actually taking cognizance upon a private
complaint and ordering issue of process.
30. The aforesaid aspect could be said to have
been completely lost sight of by the High Court,
while rejecting the application filed by the appellant
herein under Section 482CrPC, seeking quashing of
the summoning order.
31. In Mehmood Ul Rehman v. Khazir
Mohammad Tunda [Mehmood Ul Rehman v. Khazir
Mohammad Tunda, (2015) 12 SCC 420 : (2016) 1
SCC (Cri) 124] , this Court held thus : (SCC p. 430,
para 22)
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"22. ... The satisfaction on the ground
for proceeding would mean that the facts
alleged in the complaint would constitute an
offence, and when considered along with
the statements recorded, would, prima
facie, make the accused answerable before
the court. ... In other words, the Magistrate
is not to act as a post office in taking
cognizance of each and every complaint
filed before him and issue process as a
matter of course. There must be sufficient
indication in the order passed by the
Magistrate that he is satisfied that the
allegations in the complaint constitute an
offence and when considered along with the
statements recorded and the result of
inquiry or report of investigation under
Section 202CrPC, if any, the accused is
answerable before the criminal court, there
is ground for proceeding against the
accused under Section 204CrPC, by issuing
process for appearance. Application of mind
is best demonstrated by disclosure of mind
on the satisfaction. ... To be called to appear
before the criminal court as an accused is
serious matter affecting one's dignity, self-
respect and image in society. Hence, the
process of criminal court shall not be made
a weapon of harassment."
(emphasis supplied)
32. The principle of law discernible from the
aforesaid decision is that issuance of summons is a
serious matter and, therefore, should not be done
mechanically and it should be done only upon
satisfaction on the ground for proceeding further in
the matter against a person concerned based on the
materials collected during the inquiry.
33. In the aforesaid circumstances, the next
question to be considered is whether a summons
issued by a Magistrate can be interfered with in
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exercise of the power under Section 482CrPC. In the
decisions in Bhushan Kumar v. State (NCT of
Delhi) [Bhushan Kumar v. State (NCT of Delhi),
(2012) 5 SCC 424 : (2012) 2 SCC (Cri) 872]
and Pepsi Foods [Pepsi Foods Ltd. v. Special Judicial
Magistrate, (1998) 5 SCC 749 : 1998 SCC (Cri)
1400] , this Court held that a petition filed under
Section 482CrPC, for quashing an order summoning
the accused is maintainable. There cannot be any
doubt that once it is held that sine qua non for
exercise of the power to issue summons is the
subjective satisfaction "on the ground for proceeding
further" while exercising the power to consider the
legality of a summons issued by a Magistrate,
certainly it is the duty of the Court to look into the
question as to whether the learned Magistrate had
applied his mind to form an opinion as to the
existence of sufficient ground for proceeding further
and in that regard to issue summons to face the trial
for the offence concerned. In this context, we think it
appropriate to state that one should understand that
"taking cognizance", empowered under Section
190CrPC, and "issuing process", empowered under
Section 204CrPC, are different and distinct. [See the
decision in Sunil Bharti Mittal v. CBI [Sunil Bharti
Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri)
687] ].
34. In Sunil Bharti Mittal [Sunil Bharti
Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri)
687] , this Court interpreted the expression
"sufficient grounds for proceeding" and held that
there should be sufficiency of materials against the
accused concerned before proceeding under Section
204CrPC. It was held thus : (SCC pp. 644-45, para
53)
"53. However, the words "sufficient
ground for proceeding" appearing in Section
204 are of immense importance. It is these
words which amply suggest that an opinion
is to be formed only after due application of
mind that there is sufficient basis for
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proceeding against the said accused and
formation of such an opinion is to be stated
in the order itself. The order is liable to be
set aside if no reason is given therein while
coming to the conclusion that there is prima
facie case against the accused, though the
order need not contain detailed reasons. A
fortiori, the order would be bad in law if the
reason given turns out to be ex facie
incorrect."
(emphasis supplied)
35. This Court in its decision in S.W.
Palanitkar v. State of Bihar [S.W. Palanitkar v. State
of Bihar, (2002) 1 SCC 241 : 2002 SCC (Cri) 129]
expounded the difference in the ingredients required
for constituting of an offence of criminal breach of
trust (Section 406 IPC) vis-à-vis the offence of
cheating (Section 420). The relevant observations
read as under : (SCC p. 246, paras 9-10)
"9. The ingredients in order to
constitute a criminal breach of trust are : (i)
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 wilfully 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 an 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
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NC: 2025:KHC:7879
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."
36. What can be discerned from the above is
that the offences of criminal breach of trust (Section
406 IPC) and cheating (Section 420 IPC) have
specific ingredients:
In order to constitute a criminal
breach of trust (Section 406 IPC)
(1) There must be entrustment with
person for property or dominion over the
property, and
(2) The person entrusted:
(a) Dishonestly misappropriated or
converted property to his own use, or
(b) Dishonestly used or disposed of
the property or wilfully suffers any other
person so to do in violation of:
(i) Any direction of law prescribing the
method in which the trust is discharged; or
(ii) Legal contract touching the
discharge of trust (see : S.W.
Palanitkar [S.W. Palanitkar v. State of
Bihar, (2002) 1 SCC 241 : 2002 SCC (Cri)
129] ).
Similarly, in respect of an offence under
Section 420IPC, the essential ingredients are:
(1) Deception of any person, either by
making a false or misleading representation
or by other action or by omission;
(2) Fraudulently or dishonestly
inducing any person to deliver any property,
or
(3) The consent that any person shall
retain any property and finally intentionally
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NC: 2025:KHC:7879
inducing that person to do or omit to do
anything which he would not do or omit
(see : Harmanpreet Singh
Ahluwalia v. State of Punjab [Harmanpreet
Singh Ahluwalia v. State of Punjab, (2009)
7 SCC 712 : (2009) 3 SCC (Cri) 620] ).
37. Further, in both the aforesaid sections,
mens rea i.e. intention to defraud or the dishonest
intention must be present, and in the case of
cheating it must be there from the very beginning or
inception.
38. In our view, the plain reading of the
complaint fails to spell out any of the aforesaid
ingredients noted above. We may only say, with a
view to clear a serious misconception of law in the
mind of the police as well as the courts below, that if
it is a case of the complainant that offence of
criminal breach of trust as defined under Section
405IPC, punishable under Section 406IPC, is
committed by the accused, then in the same breath
it cannot be said that the accused has also
committed the offence of cheating as defined and
explained in Section 415IPC, punishable under
Section 420 IPC.
39. Every act of breach of trust may not result
in a penal offence of criminal breach of trust unless
there is evidence of manipulating act of fraudulent
misappropriation. An act of breach of trust involves a
civil wrong in respect of which the person may seek
his remedy for damages in civil courts but, any
breach of trust with a mens rea, gives rise to a
criminal prosecution as well. It has been held in Hari
Prasad Chamaria v. Bishun Kumar Surekha [Hari
Prasad Chamaria v. Bishun Kumar Surekha, (1973) 2
SCC 823 : 1973 SCC (Cri) 1082] as under : (SCC p.
824, para 4)
"4. We have heard Mr Maheshwari on
behalf of the appellant and are of the
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opinion that no case has been made out
against the respondents under Section 420
of the Penal Code, 1860. For the purpose of
the present appeal, we would assume that
the various allegations of fact which have
been made in the complaint by the
appellant are correct. Even after making
that allowance, we find that the complaint
does not disclose the commission of any
offence on the part of the respondents
under Section 420 of the Penal Code, 1860.
There is nothing in the complaint to show
that the respondent had dishonest or
fraudulent intention at the time the
appellant parted with Rs 35,000. There is
also nothing to indicate that the
respondents induced the appellant to pay
them Rs 35,000 by deceiving him. It is
further not the case of the appellant that a
representation was made by the
respondents to him at or before the time he
paid the money to them and that at the
time the representation was made, the
respondents knew the same to be false. The
fact that the respondents subsequently did
not abide by their commitment that they
would show the appellant to be the
proprietor of Drang Transport Corporation
and would also render accounts to him in
the month of December might create civil
liability for them, but this fact would not be
sufficient to fasten criminal liability on the
respondents for the offence of cheating."
40. To put it in other words, the case of
cheating and dishonest intention starts with the very
inception of the transaction. But in the case of
criminal breach of trust, a person who comes into
possession of the movable property and receives it
legally, but illegally retains it or converts it to his
own use against the terms of the contract, then the
question is, in a case like this, whether the retention
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is with dishonest intention or not, whether the
retention involves criminal breach of trust or only a
civil liability would depend upon the facts of each
case.
41. The distinction between mere breach of
contract and the offence of criminal breach of trust
and cheating is a fine one. In case of cheating, the
intention of the accused at the time of inducement
should be looked into which may be judged by a
subsequent conduct, but for this, the subsequent
conduct is not the sole test. Mere breach of contract
cannot give rise to a criminal prosecution for
cheating unless fraudulent or dishonest intention is
shown right from the beginning of the transaction
i.e. the time when the offence is said to have been
committed. Therefore, it is this intention, which is
the gist of the offence.
42. Whereas, for the criminal breach of trust,
the property must have been entrusted to the
accused or he must have dominion over it. The
property in respect of which the offence of breach of
trust has been committed must be either the
property of some person other than the accused or
the beneficial interest in or ownership of it must be
of some other person. The accused must hold that
property on trust of such other person. Although the
offence i.e. the offence of breach of trust and
cheating involve dishonest intention, yet they are
mutually exclusive and different in basic concept.
43. There is a distinction between criminal
breach of trust and cheating. For cheating, criminal
intention is necessary at the time of making a false
or misleading representation i.e. since inception. In
criminal breach of trust, mere proof of entrustment is
sufficient. Thus, in case of criminal breach of trust,
the offender is lawfully entrusted with the property,
and he dishonestly misappropriated the same.
Whereas, in case of cheating, the offender
fraudulently or dishonestly induces a person by
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deceiving him to deliver any property. In such a
situation, both the offences cannot co-exist
simultaneously.
44. At the most, the Court of the Additional
Chief Judicial Magistrate could have issued process
for the offence punishable under Section 420IPC i.e.
cheating but in any circumstances no case of criminal
breach of trust is made out. The reason being that
indisputably there is no entrustment of any property
in the case at hand. It is not even the case of the
complainant that any property was lawfully entrusted
to the appellants and that the same has been
dishonestly misappropriated. The case of the
complainant is plain and simple. He says that the
price of the goods sold by him has not been paid.
Once there is a sale, Section 406IPC goes out of
picture. According to the complainant, the invoices
raised by him were not cleared. No case worth the
name of cheating is also made out.
45. Even if the Magistrate would have issued
process for the offence punishable under Section
420IPC i.e. cheating, the same would have been
liable to be quashed and set aside, as none of the
ingredients to constitute the offence of cheating are
disclosed from the materials on record.
46. It has been held in State of
Gujarat v. Jaswantlal Nathalal [State of
Gujarat v. Jaswantlal Nathalal, 1967 SCC OnLine SC
58 : AIR 1968 SC 700 : (1968) 2 SCR 408] : (SCC
OnLine SC para 8)
"8. The term "entrusted" found in
Section 405IPC governs not only the words
"with the property" immediately following it
but also the words "or with any dominion
over the property" occurring thereafter--
see Velji Raghavji Patel v. State of
Maharashtra [Velji Raghavji Patel v. State of
Maharashtra, 1964 SCC OnLine SC 185 :
AIR 1965 SC 1433 : (1965) 2 SCR 429] .
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NC: 2025:KHC:7879
Before there can be any entrustment there
must be a trust meaning thereby an
obligation annexed to the ownership of
property and a confidence reposed in and
accepted by the owner or declared and
accepted by him for the benefit of another
or of another and the owner. But that does
not mean that such an entrustment need
conform to all the technicalities of the law
of trust -- see Jaswantrai Manilal
Akhaney v. State of Bombay [Jaswantrai
Manilal Akhaney v. State of Bombay, 1956
SCC OnLine SC 46 : AIR 1956 SC 575 :
1956 SCR 483] . The expression
"entrustment" carries with it the implication
that the person handing over any property
or on whose behalf that property is handed
over to another, continues to be its owner.
Further the person handing over the
property must have confidence in the
person taking the property so as to create a
fiduciary relationship between them. A mere
transaction of sale cannot amount to an
"entrustment"."
47. Similarly, in CBI v. Duncans Agro
Industries Ltd. [CBI v. Duncans Agro Industries
Ltd., (1996) 5 SCC 591 : 1996 SCC (Cri) 1045] this
Court held that the expression "entrusted with
property" used in Section 405IPC connotes that the
property in respect of which criminal breach of trust
can be committed must necessarily be the property
of some person other than the accused or that the
beneficial interest in or ownership thereof must be
in the other person and the offender must hold such
property in trust for such other person or for his
benefit. The relevant observations read as under :
(SCC pp. 607-608, para 27)
"27. In the instant case, a serious
dispute has been raised by the learned
counsel appearing for the respective parties
as to whether on the face of the allegations,
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an offence of criminal breach of trust is
constituted or not. In our view, the
expression "entrusted with property" or
"with any dominion over property" has been
used in a wide sense in Section 405IPC.
Such expression includes all cases in which
goods are entrusted, that is, voluntarily
handed over for a specific purpose and
dishonestly disposed of in violation of law or
in violation of contract. The expression
"entrusted" appearing in Section 405IPC is
not necessarily a term of law. It has wide
and different implications in different
contexts. It is, however, necessary that the
ownership or beneficial interest in the
ownership of the property entrusted in
respect of which offence is alleged to have
been committed must be in some person
other than the accused and the latter must
hold it on account of some person or in
some way for his benefit. The expression
"trust" in Section 405IPC is a
comprehensive expression and has been
used to denote various kinds of
relationships like the relationship of trustee
and beneficiary, bailor and bailee, master
and servant, pledger and pledgee. When
some goods are hypothecated by a person
to another person, the ownership of the
goods still remains with the person who has
hypothecated such goods. The property in
respect of which criminal breach of trust
can be committed must necessarily be the
property of some person other than the
accused or the beneficial interest in or
ownership of it must be in the other person
and the offender must hold such property in
trust for such other person or for his
benefit. In a case of pledge, the pledged
article belongs to some other person but
the same is kept in trust by the pledgee."
(emphasis supplied)
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48. The aforesaid exposition of law makes it
clear that there should be some entrustment of
property to the accused wherein the ownership is not
transferred to the accused. In case of sale of
movable property, although the payment may be
deferred yet the property in the goods passes on
delivery as per Sections 20 and 24, respectively, of
the Sale of Goods Act, 1930.
"20. Specific goods in a deliverable
state.--Where there is an unconditional
contract for the sale of specific goods in a
deliverable state, the property in the goods
passes to the buyer when the contract is
made and it is immaterial whether the time
of payment of the price or the time of
delivery of goods, or both, is postponed.
***
24. Goods sent on approval or "on
sale or return".-- When goods are delivered
to the buyer on approval or "on sale or
return" or other similar terms, the property
therein passes to the buyer--
(a) when he signifies his approval or
acceptance to the seller or does any other
act adopting the transaction;
(b) if he does not signify his approval
or acceptance to the seller but retains the
goods without giving notice of rejection,
then, if a time has been fixed for the return
of the goods on the expiration of such time,
and, if no time has been fixed, on the
expiration of a reasonable time."
49. From the aforesaid, there is no manner of
any doubt whatsoever that in case of sale of goods,
the property passes to the purchaser from the seller
when the goods are delivered. Once the property in
the goods passes to the purchaser, it cannot be said
that the purchaser was entrusted with the property
of the seller. Without entrustment of property, there
cannot be any criminal breach of trust. Thus,
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prosecution of cases on charge of criminal breach of
trust, for failure to pay the consideration amount in
case of sale of goods is flawed to the core. There
can be civil remedy for the non-payment of the
consideration amount, but no criminal case will be
maintainable for it. [See : Lalit Chaturvedi v. State
of U.P. [Lalit Chaturvedi v. State of U.P., (2024) 12
SCC 483 : 2024 SCC OnLine SC 171] and Mideast
Integrated Steels Ltd. v. State of
Jharkhand [Mideast Integrated Steels Ltd. v. State
of Jharkhand, 2023 SCC OnLine Jhar 301] .]
50. The case at hand falls in Category 1 as
laid in Nagawwa [Nagawwa v. Veeranna
Shivalingappa Konjalgi, (1976) 3 SCC 736 : 1976
SCC (Cri) 507] referred to in para 17 of this
judgment.
51. If it is the case of the complainant that a
particular amount is due and payable to him then he
should have filed a civil suit for recovery of the
amount against the appellants herein. But he could
not have gone to the Court of the Additional Chief
Judicial Magistrate by filing a complaint of cheating
and criminal breach of trust. It appears that till this
date, the complainant has not filed any civil suit for
recovery of the amount which according to him is
due and payable to him by the appellants. He seems
to have prima facie lost the period of limitation for
filing such a civil suit.
52. In such circumstances referred to above,
the continuation of the criminal proceeding would be
nothing but abuse of the process of law.
Final conclusion
53. Before we close this matter, we would like
to say something as regards the casual approach of
the courts below in cases like the one at hand. The
Indian Penal Code (IPC) was the official Criminal
Code in the Republic of India inherited from British
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India after Independence. IPC came into force in the
sub-continent during the British rule in 1862. IPC
remained in force for almost a period of 162 years
until it was repealed and replaced by the Bharatiya
Nyaya Sanhita ("BNS") in December 2023 which
came into effect on 1-7-2024. It is indeed very sad
to note that even after these many years, the courts
have not been able to understand the fine distinction
between criminal breach of trust and cheating.
54. When dealing with a private complaint, the
law enjoins upon the Magistrate a duty to
meticulously examine the contents of the complaint
so as to determine whether the offence of cheating
or criminal breach of trust as the case may be is
made out from the averments made in the
complaint. The Magistrate must carefully apply its
mind to ascertain whether the allegations, as stated,
genuinely constitute these specific offences. In
contrast, when a case arises from an FIR, this
responsibility is of the police -- to thoroughly
ascertain whether the allegations levelled by the
informant indeed fall under the category of cheating
or criminal breach of trust. Unfortunately, it has
become a common practice for the police officers to
routinely and mechanically proceed to register an FIR
for both the offences i.e. criminal breach of trust and
cheating on a mere allegation of some dishonesty or
fraud, without any proper application of mind.
55. It is high time that the police officers
across the country are imparted proper training in
law so as to understand the fine distinction between
the offence of cheating vis-à-vis criminal breach of
trust. Both offences are independent and distinct.
The two offences cannot coexist simultaneously in
the same set of facts. They are antithetical to each
other. The two provisions of IPC (now BNS, 2023)
are not twins that they cannot survive without each
other.
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56. In view of the aforesaid, the appeal
succeeds and is hereby allowed.
57. The impugned order [Delhi Race Club
(1940) Ltd. v. State of U.P., 2024 SCC OnLine All
4393] passed by the High Court is set aside so also
the order passed by the Additional Chief Judicial
Magistrate, Khurja, Bulandshahar taking cognizance
upon the complaint.
58. Pending applications, if any, shall stand
disposed of.
59. We direct the Registry to send one copy
each of this judgment to the Principal Secretary,
Ministry of Law and Justice, Union of India and also
to the Principal Secretary, Home Department, Union
of India."
5. In the instant case, a perusal of the impugned
compliant, FIR, charge sheet, statement of witnesses and
documents etc., are sufficient to come to the conclusion that
the necessary ingredients constituting the offences under
Sections 406 and 420 of IPC are conspicuously absent as can be
seen from the material on record.
6. Under these circumstances, in the light of the
judgment of the Apex Court in Delhi Race Club's case supra
and in the absence of necessary ingredients to constitute
offences punishable under Sections 406 and 420 of IPC, I am of
the considered view that continuation of the proceedings qua
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the petitioners would amount to abuse of process of law
warranting interference by this Court in the present petition.
7. In the result, the following:
ORDER
i) The criminal petition is allowed.
ii) The entire proceedings in C.C.No.24962/2024
pending before IV ACMM, Bengaluru, arising
out of FIR in Crime No.159/2024 registered by
respondent-Police, qua the petitioners, are
hereby quashed.
SD/-
(S.R.KRISHNA KUMAR)
JUDGE
VM
