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2019 Supreme(Del) 901
IN THE HIGH COURT OF DELHI AT NEW DELHI
SUNIL GAUR, J.
Meera Goyal -Appellant
Versus
State, NCT Of Delhi and others -Respondent
Criminal Miscellaneous Case No. 1718, 3142 of 2017; Criminal Miscellaneous Appeal No. 7009, 14920, 14921, 14923-14926 of 2017
Decided on : 15-03-2019
Advocate Appeared:
Sudhir Nandrajog, Adv., Vijay Aggarwal, Adv., Rohit P Ranjan, Adv., Neelam Sharma, Adv., Mohit Mathur, Adv., Shailender Babbar, Adv., Manisha Parwan, Adv., Shailender Babbar, Adv.
Not every breach of contract amounts to cheating under Section 420 of the Indian Penal Code. Deception at the inception of the contract is essential to constitute cheating.
Headnote:
Cheating - Property Dispute - Indian Penal Code, Section 420 - [Indian Penal Code, Section 420] - The court discussed the legal provisions related to cheating under Section 420 of the Indian Penal Code and emphasized that not every breach of contract amounts to cheating. It highlighted the need for deception at the inception of the contract to constitute cheating. The court also emphasized the importance of exercising caution before initiating criminal proceedings and refrained from commenting on the merits of the dispute, ultimately quashing the criminal proceedings against the petitioner.
Fact of the Case:
The petitioner, Meera Goyal, was accused of cheating in a property dispute where the complainant failed to perform her part of the agreement to sell. The petitioner justified forfeiting the earnest money, citing non-performance by the complainant. The court analyzed the facts and legal provisions to determine if cheating was established.
Finding of the Court:
The court found that the petitioner's actions did not amount to cheating under Section 420 of the Indian Penal Code. It emphasized that the dispute was predominantly civil and lacked the element of cheating. The court quashed the criminal proceedings against the petitioner and affirmed the order against the co-accused.
Issues: The key issues revolved around whether the petitioner's actions constituted cheating under Section 420 of the Indian Penal Code, and if the dispute was predominantly civil or criminal in nature.
Ratio Decidendi: The court emphasized that not every breach of contract amounts to cheating and highlighted the need for deception at the inception of the contract to constitute cheating. It also stressed the importance of exercising caution before initiating criminal proceedings and refrained from commenting on the merits of the dispute.
Final Decision: The court quashed the criminal proceedings against the petitioner and affirmed the order against the co-accused, emphasizing that the dispute was predominantly civil and lacked the element of cheating.
Sunil Gaur, J.
The above captioned first petition is directed against trial court's order of 15th November, 2016 vide which cognizance for the offence of cheating has been taken against petitioner-Meera Goel, whereas in the above captioned second petition, complainant-Priti Saraf is aggrieved by Revisional Court's order of 26th April, 2017, vide which trial court's order of 15th November, 2016 qua Ashok Kumar has been set aside.
2. Since both these petitions spring out of trial court's order of 15th November, 2016, therefore, with the consent of learned counsel for the parties, these petitions have been heard together and are being decided by this common order.
3. The facts giving rise to these petitions are that complainant-Priti Saraf had agreed to purchase 1205 sq. yards of land out of property No. 37, Friends Colony (East), New Delhi from petitioner-Meera Goyal for total consideration of Rupees Sixty Three Crores Twenty Eight Lacs Fifty Thousand Seven Hundred and Fifty (Rs.63,28,50,750/-), out of which respondent Ashok Kumar, being Property Dealer, had received commission of Rupees Fifty Lacs (Rs.50,00,000/-) and petitioner-Meera Goyal had received the earnest money of Rupees Twelve Crores Fifty Lacs (Rs.12,50,00,000/-) which stands forfeited by her, as complainant-Priti Saraf had failed to perform her part of Agreement to Sell. According to petitioner-Meera Goyal, notice of 30th January, 2013 terminating Agreement to Sell of 24th December, 2011 was served upon complainant-Priti Saraf, which was never challenged by her and instead of availing civil remedies, complainant-Priti Saraf has invoked criminal proceedings.
4. According to learned Senior Counsel for petitioner-Meera Goyal, she had obtained sanctioned plan from the competent authority and had obtained clearance from the bank and she had performed her part of Agreement, and therefore, she was justified in forfeiting the earnest money, for which no criminal prosecution can be launched. Learned senior counsel for petitioner-Meera Goyal pointed out that apart from the earnest money, she had received part of sale consideration of Rs.5.40 crores, which after termination of Agreement to Sell of 24th December, 2011 was returned to complainant-Priti Saraf and in terms of Article-5 of Agreement to Sell, petitioner-Meera Goyal was justified in forfeiting the earnest money. It was pointed out complainant had failed to provide the drawings within the timeline provided in Agreement to Sell and later on, it was provided and thereafter land of complainant was demarcated by erecting pillars, as it was known to both the sides that subject property could not be sub-divided.
5. Impugned orders are assailed by learned senior counsel for petitioner-Meera Goyal on the ground that merely because money received by her was not returned to complainant-Priti Saraf, would not justify her prosecution for the offence of cheating. It is pointed out that complainant after encashing the refunded cheque of Rs.5.40 crore (which was part of sale consideration) had replied to legal notice sent by petitioner-Meera Goyal while asserting that Agreement to Sell in question was still valid and subsisting but complainant failed to come forward with balance sale consideration. Reliance is placed upon decisions in Indian Oil Corporation Vs. Neph India Ltd., (2006) 6 SCC 736; Chandran Ratnaswami vs. K.C. Alanisami, (2013) 6 SCC 740; State of Maharashtra Vs. Sayed Mohammed Masood & anr., (2009) 4 JCC 3025; Vir Prakash Sharma Vs. Anil Kumar Agarwal & Anr., (2007) 7 SCC 373; Uma Shanker Gopalika Vs. State of Bihar & Anr., (2005) 10 SCC 336; G. Sagar Suri Vs. State of U.P., (2000) 2 SCC 636; Murari Lal Gupta Vs. Gopi Singh,2005 13 SCC 609 and Ramdev Food Product Private Limited Vs. State of Gujrat, (2015) 6 SCC 439 to submit that every breach of contract does not constitute offence of cheating and since there was no intention of cheating from its inception, therefore, petitioner-Meera Goyal cannot be prosecuted
