(PER: HON'BLE MR. JUSTICE V SRISHANANDA)
Court Government Pleader for respondent No.1.
Respondent No.2 served and unrepresented.
2. Petition is filed under Section 528 of BNSS,
3. Brief facts, which are necessary for disposal of
3.1 Respondent No.2 to the petition has filed a
complaint with Kalakeri police, Vijayapur district alleging
commission of the offence punishable under Section 420
read with section 34 of IPC, which was registered on
12.05.2024 in FIR No.55/2024.
NC: 2025:KHC-K:3829
HC-KAR
3.2 Gist of the complaint averments would reveal
that the petitioners herein are the residents of Dawalar
village and accused No.6 being the Bank Manager of
Karnataka Vikas Grameen Bank, Golageri (for short 'KVG
Bank'), have cheated the complainant.
3.3 It is alleged in the complaint that the
complainant had approached the KVG Bank for loan in the
year 2022 and at that juncture, accused No.6 told him that
the complainant has to first repay the outstanding loan
amount of Rs.6,00,000/- and directed that bring accused
No.1, who is capable of getting the additional loan, as he
is an agent to the KVG Bank.
3.4 As per the instructions of accused No.6,
complainant approached accused No.1 and he has to pay
the brokerage for getting the loan from the KVG Bank. He
has also assured the complainant that he would pay the
outstanding loan amount, which should be repaid in a
NC: 2025:KHC-K:3829
HC-KAR
month and on that condition, additional loan would be
sanctioned.
3.5 As per the instructions of accused No.1,
complainant after getting the additional loan, has paid the
outstanding loan amount and got sum of Rs.7,90,000/-
from the KVG Bank as the additional loan amount and
accused No.1, who came out of the KVG Bank, took away
the entire sum of Rs.7,90,000/-.
3.6 On 05.08.2023, all the accused persons came
to the house of the complainant and demanded
outstanding money. The complainant had sold the sheep
and had got the proceeds of Rs.18,00,000/- and entire
sum of Rs.18,00,000/- was taken away by the accused
persons in the guise of clearing the loan apart from
Rs.1,00,000/- loan received by accused No.1 from the
complainant.
4. The police after registering the case, are
investigating the matter. Very registration of the FIR is
NC: 2025:KHC-K:3829
HC-KAR
called in question in this petition by the petitioners, who
are accused Nos.1 to 5.
5. Reiterating the grounds urged in petition,
Sri G.G. Chagashetti, learned counsel for the petitioners
contends that filing of such a complaint is impermissible
and sought for quashing the pending FIR.
6. In support of his contentions, he places reliance
on the judgment of the Honourable Apex Court in the case
of Lalit Chaturvedi & Others versus State of Uttar
Pradesh & Another reported in 2024 SAR (Cri) 1291.
He invited the attention of this Court to paragraph Nos.5
to 8.
7. Paragraph Nos.5 to 8 are culled out hereunder
for ready reference:
"5. This Court, in a number of judgments,
has pointed out the clear distinction between a civil
wrong in the form of breach of contract, non-
payment of money or disregard to and violation of
the contractual terms; and a criminal offence under
NC: 2025:KHC-K:3829
HC-KAR
Sections 420 and 406 of the IPC. Repeated
judgments of this Court, however, are somehow
overlooked, and are not being applied and enforced.
We will be referring to these judgments. The
impugned judgment dismisses the application filed
by the appellants under Section 482 of the Cr.P.C. on
the ground of delay/laches and also the factum that
the chargesheet had been filed on 12.12.2019. This
ground and reason is also not valid.
6. In "Mohammed Ibrahim and Others
v. State of Bihar and Another (2009 SAR (Cri)
961), this Court had referred to Section 420 of the
IPC, to observe that in order to constitute an offence
under the said section, the following ingredients are
to be satisfied:-
"18. Let us now examine whether the ingredients
of an offence of cheating are made out. The
essential ingredients of the offence of "cheating"
are as follows:
(i) deception of a person either by making a false
or misleading representation or by dishonest
concealment or by any other act or omission;
(ii) fraudulent or dishonest inducement of that
person to either deliver any property or to
consent to the retention thereof by any person or
to intentionally induce that person so deceived to
NC: 2025:KHC-K:3829
HC-KAR
do or omit to do anything which he would not do
or omit if he were not so deceived; and
(iii) such act or omission causing or is likely to
cause damage or harm to that person in body,
mind, reputation or property
19. To constitute an offence under section 420,
there should not only be cheating, but as a
consequence of such cheating, the accused
should have dishonestly induced the person
deceived
(i) to deliver any property to any person, or
(ii) to make, alter or destroy wholly or in part a
valuable security (or anything signed or sealed
and which is capable of being converted into a
valuable security)."
7. Similar elucidation by this Court in "V.Y.
Jose and Another v. State of Gujarat and
Another" (2008 SAR Online (SC) 493), explicitly
states that a contractual dispute or breach of
contract per se should not lead to initiation of a
criminal proceeding. The ingredient of 'cheating', as
defined under Section 415 of the IPC, is existence of
a fraudulent or dishonest intention of making initial
promise or representation thereof, from the very
beginning of the formation of contract. Further, in
NC: 2025:KHC-K:3829
HC-KAR
the absence of the averments made in the complaint
petition wherefrom the ingredients of the offence can
be found out, the High Court should not hesitate to
exercise its jurisdiction under Section 482 of the
Cr.P.C. Section 482 of the Cr.P.C. saves the inherent
power of the High Court, as it serves a salutary
purpose viz. a person should not undergo
harassment of litigation for a number of years, when
no criminal offence is made out. It is one thing to say
that a case has been made out for trial and criminal
proceedings should not be quashed, but another
thing to say that a person must undergo a criminal
trial despite the fact that no offence has been made
out in the complaint. This Court in V.Y. Jose (supra)
placed reliance on several earlier decisions in "Hira
Lal Hari Lal Bhagwati v. CBI" (2003 (SAR) (Cri)
474), "Indian Oil Corporation v. NEPC India
Ltd." (2006 SAR (Cri) 843), "Vir Prakash
Sharma v. Anil Kumar Agarwal" (2007 SAR
(Cri) 824) and "All Cargo Movers (I) (P) Ltd. v.
Dhanesh Badarmal Jain"(2007 SAR Online (SC)
520.
8. Having gone through the complaint,
which was registered as an FIR and the assertions
made therein, it is quite clear that respondent no.
2/complainant Sanjay Garg's grievance is regarding
failure of the appellants to pay the outstanding
- 10 -
NC: 2025:KHC-K:3829
HC-KAR
amount, in spite of the respondent no. 2/complainant
-Sanjay Garg's repeated demands. The respondent
no. 2/complainant - Sanjay Garg states that the
supplies were made between the period 01.12.2015
and 06.08.2017. The appellants had made the
payments from time to time of Rs. 3,76,40,553/-
leaving a balance of Rs. 1,92,91,358/-."
8. On careful consideration of the principles of law
enunciated by the Honourable Apex Court in the case of
Lalit Chaturvedi in the light of the factual aspects
involved in the case on hand, there is no breach of
contract between the complainant and other accused
persons.
9. It is the complainant's case that the accused
persons have joined together and cheated him in a sum of
Rs.26,90,000/-.
10. In other words, there is a clear distinction
between the cheating and breach of contract as could be
seen from the principles of law enunciated by the
Honourable Apex Court in Lalit Chaturvedi relied on by
- 11 -
NC: 2025:KHC-K:3829
HC-KAR
the counsel for the petitioners itself. Therefore, the
principles of law enunciated in Lalit Chaturvedi's case is
not applicable to the case on hand.
11. Since the FIR is under challenge and the police
are investigating the matter, reserving the right of the
petitioners to challenge the adverse report, if any, the
present petition needs to be dismissed.
12. Hence, the following:
ORDER
The Criminal Petition is dismissed.
Sd/-
(V SRISHANANDA)
JUDGE
SRT/RSP
CT:PK
