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IN THE HIGH COURT OF JHARKHAND AT RANCHI
D.N. UPADHYAY, J.
B.N. Hotels Private Limited, Rajendra Kumar Gupta - Petitioners
Versus
The State of Jharkhand, Pradeep Kumar Sonthalia - Respondents
W.P. (Cr.) No. 49 of 2012
Decided on : 18.05.2012
Cheating - Criminal Proceedings - Indian Penal Code - Sections 406/420/506 - [SUMMARY OF ACT SECTIONS REFERENCED AND DISCUSSED: Sections 415, 24, 25, 23, 34, 291 of the Indian Penal Code; Sections 56, 58A, 60A, 60B, 61 to 68 of the Companies Act, 1956; Section 156(3) of the Criminal Procedure Code, 1973] - The court discussed the ingredients of cheating under Section 415 of the Indian Penal Code, the necessity of deception, and the fraudulent and dishonest intention required for the offence. It also considered the corporate criminal liability and the attribution of criminal intent to a corporate body. The court emphasized the importance of deception in inducing the victim to part with property and the scope of nondisclosure of relevant information as a form of misrepresentation leading to deception. The judgment also highlighted the prospectus/private placement memorandum misleading statement and the company's liability for cheating. The court referred to the need for the accused to have an opportunity to prove the averments made in the complaint and the material collected by the investigating officer to constitute the alleged offence. The judgment concluded that the FIR and the criminal proceeding could not be quashed, dismissing the writ application and vacating the stay order.
Fact of the Case:
The case involved a dispute arising from a development agreement between the petitioners and the complainant, where the petitioners failed to hand over the title deed of the property, causing financial constraints for the complainant's construction work. The complainant alleged cheating and misappropriation of property by the petitioners.
Finding of the Court:
The court found that the ingredients of cheating under Section 415 of the Indian Penal Code were prima facie present, emphasizing the necessity of deception and the fraudulent and dishonest intention. It also highlighted the corporate criminal liability and the attribution of criminal intent to a corporate body. The court concluded that the FIR and the criminal proceeding could not be quashed.
Issues: The issues involved the alleged cheating and misappropriation of property by the petitioners, the necessity of deception for the offence of cheating, and the corporate criminal liability.
Ratio Decidendi: The judgment emphasized the necessity of deception in inducing the victim to part with property, the scope of nondisclosure of relevant information as a form of misrepresentation leading to deception, and the company's liability for cheating. It also highlighted the need for the accused to have an opportunity to prove the averments made in the complaint and the material collected by the investigating officer to constitute the alleged offence.
Final Decision: The court dismissed the writ application, vacated the stay order, and allowed the investigating officer to proceed with the investigation and do the needful in accordance with the law. The petitioners were granted liberty to raise relevant issues at the appropriate stage before the appropriate court.
D.N. Upadhyay, J.
This Criminal Writ Application has been filed for quashing the entire criminal proceeding arising out of Dhanbad Bank More P.S. Case No.104 of 2012 dated 2.2.2012, corresponding to G.R.No.392 of 2012, registered under Sections 406/420/506 and 34 of the Indian Penal Code.
2. The present case was registered on the basis of a complaint vide C.P. Case No.154 of 2012 filed on 24.1.2012 by the respondent No.2Complainant and the said complaint was transferred to the concerned Police Station for institution and investigation under Section 156(3) Cr. P.C.
3. The brief facts appearing from the First Information Report/Complaint is that the petitioners happen to be the owner of landed property area measuring 73 decimals at Dhanbad which was mortgaged with the United Bank of India by M/s World Metal Movers, a Company floated by the family of petitioner No.2. Due to nonpayment of loan advanced in favour of said company, the jurisdiction of Debt Recovery Tribunal was invoked by the Bank and the property was at the verge of auction sale in the year 2007. The petitioners under that financial constraints approached the respondent No.2 and offered land for development and requested to pay Rs.55,00,000/ (Fifty five lakh) as advance for getting the D.R.T. case disposed of. The Respondent No.2 conceded the request and paid aforesaid sum of Rs.55,00,000/ (Fifty five lakh) as detailed given by them to the petitioners in order to facilitate them to get the land released from the said mortgage. Thereafter development agreement on 8.8.2007 was signed between the parties as per the terms and conditions mentioned therein. After execution of the said development agreement, the land in question was handed over to the complainant on 03.04.2008 where after construction work as per approved plan commenced. Till the dispute arose the Respondent No.2 had already spent Rs.5,21,59,889.00/. According to the Development Agreement, the original deed of the land was required to be handed over to the Respondent No.2 for the purpose of creating mortgage over the said property for facilitating the complainant to take loan for the smooth progress of the development work but the petitioners in spite of repeated requests did not hand over the documents which caused financial crisis in the progress of the construction work. Initially, the Respondent No.2 tried to get the matter solved by using arbitration clause mentioned in the agreement and after some litigation an Arbitrator was appointed and the matter was referred to him. The complainant was shocked to receive letter dated 31.12.2011 issued by the petitioners by which the power of attorney was revoked and vide letter dated 3.1.2012 the development agreement was not only terminated but the complainant was also asked to hand over the possession of the land. After receiving aforesaid letters, the complainant felt cheated and had reason to believe that the property invested by him has been misappropriated and then contacted the accused petitioner No.2 but he was threatened with dire consequences and hence he lodged a complaint as referred to above.
4. Before adverting the submissions made by the parties and the grounds taken by them, I feel it desirable to mention hereunder the indisputable facts.
(a) The schedule property was put under mortgage by the petitioners with the United Bank of India and the matter was pending before the Debt Recovery Tribunal and the property was at the verge of auction sale.
(b) A sum of Rs.55,00,000/ (Fifty five lakh) was paid to the petitioners for getting the mortgaged property redeemed and after it being redeemed the development agreement was executed between the parties on 8.8.2007.
(c) The possession of land was handed over to the complainant over which the development and construction work commenced.
(d) The petitioner did not hand over Title Deed relating to schedule property after which the complainant filed a suit in the Court of SubJudgeI at Dh
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