JHARKHAND HIGH COURT
R.R. PRASAD. J.
Surendra Upadhayay - Petitioner
Versus
State of Jharkhand & Anr. - Opp. Parties
Cr. M.P. No. 738 of 2012
Decided On : November 6, 2012
Cheating - Business Loan - The court quashed the criminal proceeding and order taking cognizance of the offence under Sections 406/420 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, as the necessary elements for constituting the offence of cheating and Section 406 of the Indian Penal Code were found to be lacking.
Fact of the Case:
The petitioner took a friendly loan from the complainant with a promise to return it within four months. When the money was not repaid, a cheque issued by the petitioner got dishonoured, leading to the registration of a criminal case against the petitioner.
Finding of the Court:
The court found that the necessary elements for constituting the offence of cheating and Section 406 of the Indian Penal Code were lacking, as there was no indication of fraudulent or dishonest inducement by the petitioner and the complainant was not induced to part with the money through deception.
Issues: Alleged offence of cheating and Section 406/420 of the Indian Penal Code, illegality in taking cognizance of the offence.
Ratio Decidendi: The court held that for the offence of cheating, there must be fraudulent or dishonest inducement and deception, which were found to be lacking in the case. Similarly, the necessary ingredients for constituting the offence under Section 406 of the Indian Penal Code were also found to be lacking.
Final Decision: The court quashed the criminal proceeding and the order taking cognizance of the offence under Sections 406/420 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, partly allowing the application.
By the Court-Heard learned counsel appearing for the petitioner, State and learned counsel appearing for the Opp. party No.2.
2. This application has been filed for quashing of the entire criminal proceeding of Chas P.S. Case No. 126 of 2007 (G.R. No.1095 of 2007) as well as order dated 11.08.2010 whereby and whereunder cognizance of the offence punishable under Sections 406/420 of the Indian Penal Code and also under Section 138 of the Negotiable Instruments Act, has been taken against the petitioner.
3. Before adverting to the submissions advanced on behalf of the parties, the case of the complainant needs to be taken notice of:
4. It is the case of the complainant that there was a business relationship in between the complainant and the petitioner and in that course, the petitioner took a friendly loan by making promise that it would be returned within four months. In spite of passing off four months when the money was not paid reminder was given to the petitioner to make payment and then a cheque of Rs.l,00,000/- was issued in favour of the complainant, which on its deposit got dishonoured.
5. On such allegation a Complaint Case No. 186 of 2002 was registered which was sent under Section 156(3), Cr PC for its institution and investigation before the concerned police station. upon which Chas P.S. Case No. 126 of 2007 (G.R. No. 1095 of 2007) was registered under Sections 406/420 of the Indian Penal Code and also under Section 138 of the Negotiable Instruments Act.
6. After submission of the chargesheet cognizance of the offence was taken under Sections 406/420 of the Indian Penal Code and also under Section 138 of the Negotiable Instruments Act vide order dated 11.08.2010 which is under challenge.
7. Learned counsel appearing for the petitioner submits that even accepting the entire allegation to be true no offence is made out either under Section 406 or 420 of the Indian Penal Code as the petitioner has never been alleged to have induced the complainant fraudulently or dishonestly to part with the money rather it is a simple case of breach of promise and. thereby the Court did commit illegality in taking cognizance of the offence under Sections 406 and 420 of the Indian Penal Code.
8. As against this. Mr. Atanu Banerjee learned counsel appearing for the Opp. party No. 2 submits that there was intention right from the beginning not to return the money after taking loan from the complainant and thereby offence of cheating is certainly made out and hence the order taking cognizance never warrants to be quashed.
9. In the context of the submission advanced on behalf of the parties one needs to take notice of the Section 415 of the Indian Penal Code which reads as follows :-
"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 persons shall retain any property. or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body mind reputation or property is said to cheat".
10. From its reading it appears that following ingredients should necessarily be there for constituting offence of cheating.
(1) there should be fraudulent or dishonest inducement of a person by deceiving him;
(2)(a) the person so deceived should be induced to deliver any property to any persons. or to consent that any person shall retain any property or
(b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived.
(3) in cases covered by 2(b) the act or omission should be one which causes or is likely to cause damage or harm to the person induced in bodily or reputation or property.
11. Thus, the first element necessary for constituting the offence of cheating is a deception of the complainant by the accused. Unless
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