No offence under Sections 406/420 IPC without deception at transaction inception or entrustment with dishonest misappropriation; business account disputes civil, not criminal; proceedings quashed under Section 482 CrPC as abuse of process. (32 words)

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

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, 1973 with a prayer to quash the entire criminal proceeding in connection with Complaint Case No. 7773 of 2020 including the order taking cognizance dated 24.02.2023 passed by the Judicial Magistrate 1st Class XXVII, Ranchi whereby and whereunder, learned Judicial Magistrate has taken cognizance of offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 against the petitioner.

3. The brief facts of the case is that the allegation against the petitioner is that the petitioner was doing business along with the complainant from March 2020 to September 2020. In the month of March 2020, both the parties went to Mumbai, Ahmedabad to visit different manufacturers and distributors for purchasing goods and medical items. Between the period from March 2020 to September 2020, when the goods were supplied to different hospitals and government institutions. In the meanwhile, on 04.06.2020 the petitioner sent a legal notice to the O.P. No.2 demanding outstanding dues of Rs.29,95,152/- (Rupees twenty nine lakhs ninety five thousand and one hundred and fifty two)arising out of non-payment of invoices raised against the company of complainant. Thereafter, on 23.06.2020 the complainant replied to the legal notice and denied the outstanding dues of Rs. 29,95,152 and raised questions about arriving at this amount without settling the books of accounts and deduction of 50% profit share of the complainant and adjustment of credit notes to be issued for overpriced invoices. Thereafter, complainant showed the petitioner the entire calculation of accounts and after finalization a pending dues of Rs.41,91,707.54 being due and payable by the accused, but the accused refused to accept the accounts. Though the complainant offered to settle the disputes mutually but the petitioner did not agree with the same and refused to give the accounts in respect of the business involving the transaction of about Rs. 41 lakhs.

4. Learned counsel for the petitioner relied upon the judgment of the Hon’ble Supreme Court of India in the case of Uma Shankar Gapalika vs. State of Bihar and Another reported in (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 therein the Hon’ble Supreme Court of India has reiterated the settled principle of law that in order to constitute the offence of cheating the accused persons must play deception at the very inception and if such intention to cheat has developed later on, the same will not amount to cheating.

5. Learned counsel for the petitioner next submits that in this case there is no allegation against the petitioner of playing deception since the beginning of transaction between the parties nor there is any allegation of any entrustment of any property to the petitioner, hence neither the offence punishable under Section