IMPORTANT POINT
Not every breach of contract amounts to criminal offences under the Indian Penal Code; deception at the inception is crucial for an offence under Section 420 IPC, and clear entrustment is required for an offence under Section 405 IPC.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

1. Heard the parties.

2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash the entire criminal proceeding in connection with Complaint Case No. 3605 of 2019 instituted for the offence punishable under Sections 406, 420, 120B, 34 of the Indian Penal Code including the order taking cognizance dated 17.02.2023 for the offence punishable under Sections 406, 420, 120 B, 34 of the Indian Penal Code which is pending in the court of learned JMFC-XXI, Ranchi.

3. The brief fact of the case is that the petitioners entered into a partnership with the accused persons and the complainant/opposite party No. 2 and the complainant/opposite party No. 2 invested Rs. 33,28,000/- but the petitioners are not refunding the money with interest and profit and subsequently returned Rs. 33,28,000/- after filing of the case.

4. Learned senior counsel for the petitioners submits that the dispute between the parties is basically a civil dispute and there is no allegation against the petitioners of having any intention to deceive the complainant since inception. Learned senior counsel for the petitioners relies upon the judgment of this Court dated 17th July, 2023 passed in Cr.M.P. No. 3161 of 2021 in the case of Rajesh Ranjan and Another vs. State of Jharkhand and Another and judgment dated 13.06.2023 passed in Cr. M.P. No. 617 of 2021 in the case of Ashok Agrawal and Others vs. State of Jharkhand and Another and submits that therein this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar and Another, (2005) 10 SCC 336 paragraph-6 of which reads as under:

“6..........It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.”

(Emphasis supplied)

And submits that this Court also by relied upon the judgment of the Hon’ble Supreme Court of India in the case of Satish Chandra Ratanlal Shah vs. State of Gujarat and Another, (2019) 9 SCC 148 paragraph-11 of which reads as under:

“11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with Section 406 IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that Respondent 2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, Respondent 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognises a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment.”

Has held that a mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 of the Indian Penal Code without there being a clear case of entrustment.

5. Learned senior counsel for the petitioners submits that the petitioners have already paid Rs. 33,28,000/- to the complainant and Rs. 42,50,000/- has been paid to the enquiry witness-Arbind Krishna Amresh. It is next submitted that no offence punishable under the penal provisions is made out against the petitioners in the absence of