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1984 Supreme(Del) 77

High Court Of Delhi
NAVIN VARSHNEYA - Appellant
Versus
STATE OF DELHI - Respondent
Criminal Miscellaneous (Main) 435 of 1983
Decided On : 04/02/1984

Advocates Appeared:
D.R.Sethi, SATISH CHANDRA AGRAWAL

The issuance of post-dated cheques against an existing liability does not constitute cheating under Section 420 of the Indian Penal Code in the absence of a dishonest intention to deceive.

Headnote:

CRIMINAL LAW - CHEATING - SECTION 420 INDIAN PENAL CODE - DISHONOURED CHEQUES - CIVIL LIABILITY VS CRIMINAL PROSECUTION - INHERENT JURISDICTION OF HIGH COURT TO QUASH CRIMINAL PROCEEDINGS - ESSENTIAL INGREDIENTS OF OFFENCE - INTENTION TO DECEIVE - BROKEN PROMISES.

Fact of the Case:

Petitioners issued three post-dated cheques to the complainant firm as payment for goods received. The first cheque was dishonoured, and the remaining two were not presented for payment. The complainant filed a complaint under Sections 420, 120-B, and 34 of the Indian Penal Code, alleging cheating. The magistrate summoned the petitioners, and the order was upheld in revision by the Additional Sessions Judge.

Finding of the Court:

The court held that the complaint did not disclose the essential ingredients of the offence of cheating under Section 420 of the Indian Penal Code. The cheques were issued against an existing liability, and there was no dishonest intention to deceive the complainant. The court further held that the magistrate and the Additional Sessions Judge had erred in exercising their discretion in issuing process against the petitioners.

Issues: 1. Whether the issuance of post-dated cheques against an existing liability constitutes cheating under Section 420 of the Indian Penal Code? 2. Whether the magistrate and the Additional Sessions Judge erred in exercising their discretion in issuing process against the petitioners?

Ratio Decidendi: 1. The court held that the issuance of post-dated cheques against an existing liability does not constitute cheating under Section 420 of the Indian Penal Code. The essential ingredient of cheating is a dishonest intention to deceive, which was not present in this case. 2. The court held that the magistrate and the Additional Sessions Judge had erred in exercising their discretion in issuing process against the petitioners. The complaint did not disclose the essential ingredients of the offence, and there was no evidence of a dishonest intention to deceive.

Final Decision: The court quashed the orders of the magistrate and the Additional Sessions Judge and discharged the petitioners.

Jagdish Chandra

( 1 ) THIS petition assails the order dated 3-2-1983 passed by Shri T. S. Oberoi, Addl. Sessions Judge, Delhi on a revision having been preferred by the petitioners Naveen Varshneya and Smt. Nirmal Varshneya against the order dated 22-5-1982 passed by Mrs. Aruna Suresh, Metropolitan Magistrate, Delhi whereby the learned magistrate had summoned both the petitioners in the complaint filed under Sections 420, 120-B and also under Section 34 Indian Penal Code and which order was held valid by Shri T. S. Oberoi in revision.

( 2 ) PETITIONER No. 1 Naveen Varshneya and petitioner No. 2 Mrs. Nirmal Varshneya are husband and wife and whereas the former is sole proprietor of M/s Kumar Enterprises the latter is the sole proprietor of M/s Kumar Traders. Both these concerns of the petitioners have been having business dealings with M/s Radha Krishan Bimal Kumar (P.) Ltd, Khari Baoli Delhi in which the complainant Suresh Chand Sharma is the Sales Executive. Petitioner No. 1 Naveen Varshneya alone had been in contact with M/s Radha Krishan Bimal Kumar (P) Ltd. for making purchases of orient black, phil black and zinc oxide etc. and it was the name of M/s Kumar Enterprises as well as in the name of his wife s concern M/s Kumar Traders that these purchases were made by petitioner No. 1 for a period of about 8 months from November 1979 upto July 1980, wherein he was to pay a balance sum of Rs. 5052. 75 in the account of his own concern M/s Kumar Enterprises and another sum of Rs. 43,720. 60 in the account of his wife s concern M/s Kumar Traders, the total thus being to the tune of Rs. 48,773. 25.

( 3 ) PETITIONER No. 1 had already cleared off the price payment in respect of a large number of various items of the aforesaid purchases, by means of post-dated cheques and gave the following three post-dated cheques admittedly against the aforesaid subsisting liability of Rs. 48,773. 25 as on 12-7-1980 allegedly assuring that the same would be honoured on presentation on due dates:

( 4 ) THE first cheque aforesaid dated 14-7-80 for Rs. 25,460. 00 was dishonoured with the remarks "referred to drawer" meaning thereby that petitioner no. I had no amount in his bank account. The remaining two aforesaid cheques were not presented for encashment on due dates in view of the first cheque dated 14-7-80 having already been dishonoured.

( 5 ) ACCORDING to the petitioners the aforesaid post-dated cheques were issued when petitioner No. 1 was given to understand that these amounts were due towards good already received but later on when he checked the accounts, it came to light that no such amounts were due to M/s Radha Krishan Bimal Kumar (P) Ltd. and in fact a sum of Rs. 52,088. 25 was due to petitioner no. 1 and his concern M/s Kumar Enterprises and thus feeling that the aforesaid. cheques had been wrongly issued, the payment of all those three cheques was. stopped and intimation to this effect was sent to the bank and M/s Radha Krishan Bimal Kumar (P) Ltd. complainant-firm was also informed about the same in writing and consequently it was only the first post-dated cheque which was presented for encashment and not the remaining two cheques.

( 6 ) THE complainant-firm M/s Radha Krishan Bimal Kumar (P) Ltd. lodged a report with P. S. Labori Gate on 20-7-1981 making allegations of cheating against the petitioners but the police took no action upon the same.

( 7 ) THEREAFTER on 1-11-1981 the complainant-firm filed a civil suit for the recovery of Rs. 86,038. 62 against both the petitioners and their aforesaid proprietory concerns and the same is pending.

( 8 ) THE petitioners alleged that in order to brow-beat, harass and blackmail them Suresh Chand Sharma Sales Executive of the Complainant firm filed a complaint under Section 420 read with Sections 120-B and 34 Indian Penal Code in the court of Mrs. Aruna Suresh, Metropolitan Magistrate, Delhi, presently pending in the court of Shri D. S. Sidhu, Metropolitan Magistrate, Delhi wherein Mrs. Aruna Sur
















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