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2023 Supreme(Jhk) 1033

IN THE HIGH COURT OF JHARKHAND AT RANCHI
SANJAY KUMAR DWIVEDI, J.
Ashok Kumar Agarwal & Ors. - Petitioners
Versus
The State of Jharkhand & Ors. - Opposite Parties
Cr. M.P. No. 2896 of 2016
Decided On : 12-10-2023

Advocates Appeared:
For the Petitioners: Mr. Indrajit Sinha, Mr. Rishav Kumar.
For the Opposite Parties : Mr. Prabhash Kumar.

A mere breach of contract does not give rise to criminal prosecution for cheating, and fraudulent or dishonest intention is the basis of the offence of cheating.

Headnote:

quashing - criminal proceeding - Indian Penal Code, Section 418/34, Section 420 - The court discussed the essential ingredients of cheating and dishonestly inducing delivery of property under Section 415 and Section 420 of the Indian Penal Code. It highlighted the requirement of fraudulent or dishonest inducement, false representation with dishonest intention, and the distinction between mere breach of contract and cheating. The court also emphasized that a mere breach of contract does not give rise to criminal prosecution for cheating, and fraudulent or dishonest intention is the basis of the offence of cheating.

Fact of the Case:

The petitioners filed for quashing of the entire criminal proceeding in connection with a complaint case alleging non-payment of dues for a commercial transaction. The police had earlier submitted final form stating the case is civil in nature, but the court took cognizance under Section 418/34 of the Indian Penal Code.

Finding of the Court:

The court found that the case was arising out of a commercial transaction and there was no intention of cheating from the very beginning. It concluded that the case was civil in nature and quashed the entire criminal proceeding.

Issues: The issues revolved around the nature of the case, the essential ingredients of cheating, and the distinction between civil disputes and criminal offences.

Ratio Decidendi: The court emphasized that a mere breach of contract does not give rise to criminal prosecution for cheating, and fraudulent or dishonest intention is the basis of the offence of cheating. It also highlighted the requirement of fraudulent or dishonest inducement, false representation with dishonest intention, and the distinction between mere breach of contract and cheating.

Final Decision: The court quashed the entire criminal proceeding and allowed any civil proceeding to be decided in accordance with the law without prejudice to the order.

JUDGMENT :

Heard Mr. Indrajit Sinha, learned counsel for the petitioners and Mr. Prabhash Kumar, learned counsel for opposite party no.2. On repeated calls, nobody has responded on behalf of the State.

2. This petition has been filed for quashing of the entire criminal proceeding in connection with C1/512/2014, corresponding to G.R. No.3608/2013 including the order taking cognizance dated 29.09.2014, pending in the Court of the learned Judicial Magistrate, 1st Class at Jamshedpur.

3. The complaint case was filed alleging therein that the complaint company-M/s Arzoo Construction deals in the business of Sponge Iron Kiln Erection and alignment, structural fabrication and erection with Civil Works with its office at Marina City Shop No.8 near Sahara City Mango, Jamshedpur. As per the quotation dated 24.02.2007, submitted by the accused company and subsequent discussion with accused nos. 2 to 4 at Jamshedpur office of the complainant, they planned Work Order from coming out the job by the complainant on the terms and conditions agreed by both the parties. As per the specification and consent of accused nos. 2 to 4, the complainant completed the job as per the work order and submitted the Bill for payment for the period till 31.05.2008 amounting to Rs.14,45,250/- out of which the accused persons paid only a sum of Rs.10,00,000/- leaving behind the balance sum of Rs.4,45,250/-. The accused persons and the other officers connected with the job done by the complainant company were highly satisfied and permitted the complainant company to continue with the job and directed the complainant company to submit his Bill accordingly. Initially, the complainant was not agreed to continue with the further job allotted by the accused company to the complainant since his balance due of Rs.4,45,250/- was not paid, but at the persistent request and representation made by accused nos. 2 and 3 that in future they will not make delay in making payment after submission of the bill by the complainant company and placing implicit reliance upon the version of the accused nos. 2 and 3, the complainant agreed to continue with the job offered by the accused company to the complainant. Accordingly, the complainant continued with the further job entrusted to him by the accused persons and the next bill for Rs.5,93,131/- till 18.07.2008 and bill of the TG Building amount to Rs.1,20,000/- was also submitted which was duly checked by the G.M. and other officials of the company. The complainant carried out the job of the accused company for the total amount of Rs.98,67,521/- till 12.08.2008 out of which the accused company paid a total sum of Rs.42,82,251/- as its bill transpires from the Ledger account of the complainant company maintained by the complainant in its regular course of business. In the above connection, the lawyer of the complainant company in his notice dated 21.10.2011 through inadvertence made demand of Rs.15,97,147/- from the accused company in place of Rs.42,82,251/-. The aforesaid complaint was sent to the Mango Police stating for the institution of the case against the accused persons and for submission of final form after investigation and after conclusion of the investigation, the Mango Police submitted final form No.266/13 against the accused persons with the observation that the case relates to civil dispute.

4. Mr. Indrajit Sinha, learned counsel for the petitioners submits that earlier the case being Mango P.S. Case No.586/2013 has been registered on the same set of allegations, which was investigated by the police and final form was submitted disclosing the case is civil in nature. He further submits that pursuant to that protest petition was filed and on the protest petition, the learned Court has taken cognizance under Section 418/34 of the Indian Penal Code. He further submits that the case was registered as a fresh dispute of payment of bill for the period till 31.05.2008 amounting to Rs.14,45,250/- out of which it is admitted by the

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