IMPORTANT POINT
Mere default in loan repayment does not constitute cheating unless there was deception at the inception of the contract.

JUDGMENT :

HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY

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 F.I.R. of Kadma P.S. Case No.147 of 2022 registered for the offence punishable under Sections 406 and 420 of the Indian Penal Code arising out of Complaint Case No.418 of 2021 along with entire criminal proceedings of the said case which is now pending before the learned S.D.J.M., Jamshedpur.

3. The brief facts of the case is that the petitioner availed a loan for working capital of Rs.6,00,000/- on 19.09.2017 from the complainant Bank by executing various loan documents but subsequently he defaulted in repayment of the loan amount and changed his residential address and mobile number without informing the Bank as the complainant- Bank was of the feeling that right from the beginning the petitioner-accused approached the Bank with dishonest intention of cheating and committed criminal breach of trust and due to this reason he has planned with cool mind and changed his residential address and committed criminal breach of trust for his illegal gain causing illegal loss to Bank. Hence, Complaint Case No.418 of 2021 has been filed which upon being referred to police under Section 156 (3) of Cr.P.C., the F.I.R. of Kadma P.S. Case No.147 of 2022 has been registered in which investigation is going on.

4. Learned counsel for the petitioner relies upon the judgment of this Court in the case of Mr. Gunjan Koushik vs. The State of Jharkhand & Another dated 23rd of November, 2023 passed in Cr.M.P. No.2050 of 2022 wherein 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 & Anr. reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:-

6. “Xxxx xxxx xxxx 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 this Court reiterated the settled principle of law 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 will not amount to cheating.

5. Learned counsel for the petitioner draws the attention of this Court towards the supplementary affidavit and submits that as although the fact that the loan was availed in the year 2017 but the complaint having been filed in the year 2021 which shows that for four years the petitioner was satisfactorily maintaining the accounts with the complainant-Bank and four years is too long a period to allege that since the beginning of availing the loan the petitioner had the intention to cheat the complainant- Bank. Hence, it is submitted that the complainant- Bank has given a cloak of criminal offence to a purely civil dispute. It is lastly submitted that the F.I.R. of Kadma P.S. Case No.147 of 2022 arising out of Complaint Case No.418 of 2021 along with entire criminal proceedings of the said case which is now pending before the learned S.D.J.M., Jamshedpur, be quashed and set aside.

6. Learned Addl.P.P. appearing for the State and learned counsel for the opposite party No.2 vehemently oppose the prayer of the petitioner to quash and set aside the F.I.R. of Kadma P.S. Case No.147 of 2022 arising out of Complaint Case No.418 of 2021 along with entire criminal proceedings of the said case and submit that it