The central legal point established is that the exchange of demonetised notes must adhere to the policy prescribed by the Reserve Bank of India to determine the commission of offences under the Indian Penal Code.

R.M. Borde, J.

Heard.

2. Rule. Learned Addl. Public Prosecutor and learned Counsel waive service of notice for respective respondents. With the consent of the parties, application is taken up for final disposal at admission stage.

3. The applicant is praying for quashment of the criminal proceedings initiated against him in the shape of Regular Criminal Case No.85/2017 in pursuance to the first information report No.186 of 2016 lodged by respondent No.2 at Jilha Peth Police Station, Jalgaon on 23rd December 2016. The respondent No.2 alleges in the complaint that he wanted to convert demonetised currency notes worth Rs. 30 lakhs into the valid currency notes, which is legal tender in accordance with the policy prescribed by the Reserve Bank of India. The informant approached one Chandrashekhar Krishna Chaudhary and his wife Chandralekha. The informant also approached his maternal father-in-law by name Sunil Ramu Jangle, applicant herein who assured to help the informant in exchange of notes.

4. The applicant is serving in Janata Co-operative Bank at Jalgaon. Informant handed over the demonetised notes worth Rs. 30 lakhs on 28th November 2016 to Chandrashekhar Chaudhari and his maternal uncle's niece Chandralekha who had extended assurance to him to help in exchange of notes. It was also decided between the parties that informant would be paid Rs. 26 lakhs in lieu of tender of notes worth Rs. 30 lakhs. The informant stated that the accused failed to deliver the valid currency notes as assured and have thus committed offences punishable under Sections 420 and 406 of the Indian Penal Code. The question that falls for consideration in the matter is whether the allegations levelled against the applicant herein constitute offences punishable under Sections 406 and 420 of the Indian Penal Code. It is not a matter of dispute that the Reserve Bank of India declared the policy of demonetisation of currency notes of Rs. 500 and Rs. 1,000 on 8th November 2016. It is declared in the gazetted notification dated 8th November 2016 bearing No.RB/2016-17/12 DCM (Pig) No.1226/10.27.00/2016-17 that the Bank notes of the existing series issued by Reserve Bank of India shall cease to be a legal tender w.e.f. 9th November 2016 to the extent specified in the Notification. The Notification prescribed the modalities for exchange of the old notes. The policy provides for the mechanism of the exchange of the old notes. The bearer of the notes is expected under the policy to exchange the notes only at the Reserve Bank of India and other prescribed Banks and other instrumentalities as specified in the Notification. It cannot be disputed that under the policy declared by the Reserve Bank of India on 8th November 2016, the existing currency notes of Rs. 500/- and Rs. 1,000/- from 9th November 2016 cannot be considered as legal tender. Admittedly, the applicant herein or any of the persons cannot be said to be the individuals authorised to receive demonetised Bank notes and exchange the same with the valid currency. Firstly, it was not permissible for the applicant himself to maintain the stock of demonetised currency without proper disclosure or to make any attempt to exchange the same or to transact the same as a legal tender with any private individual. It was also not permissible for the accused to extend any assurance in respect of exchange of demonetised notes, since he is not the authority prescribed under the policy declared by the Reserve Bank of India on 8th November 2016.

5. The question is as to whether ingredients of Section 420 and 406 of the Indian Penal Code are satisfied so far as the allegations levelled against the applicant concerned. The definition of cheating is prescribed under Section 415 of the Indian Penal Code, which reads thus :

415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property