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IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. NIRMAL KUMAR, J.
J. Ravi & Others - Appellant
Versus
The State by the Inspector of Police, Salem & Another - Respondent
Crl.O.P.No. 29012 of 2018 & Crl.M.P.No. 16946 of 2018
Decided On : 27-05-2022
Quash Petition - Criminal Original Petition - Section 420 IPC - Summary
Fact of the Case:
The petitioners sought to quash the FIR filed against them for an offence under Section 420 IPC. The case involved a dispute between the petitioners and the 2nd respondent, who had lent a substantial amount to the petitioners. The petitioners alleged harassment and coercion by the 2nd respondent, while the 2nd respondent accused the petitioners of cheating and fraudulent activities.
Finding of the Court:
The court found that the complaint and FIR were based on inherent latches and improbabilities, and contained elements of a civil dispute rather than a criminal offence. The court also noted the inordinate delay in lodging the complaint and found that the continuation of the investigation would amount to an abuse of the legal process. As a result, the court quashed the FIR against the petitioners.
Issues: The main issues revolved around the disputed loan transactions, allegations of harassment and coercion, and the delay in lodging the complaint. The court had to determine whether the case warranted criminal prosecution or if it was more suited for civil resolution.
Ratio Decidendi: The court emphasized that the essential ingredients to attract an offence under Section 420 IPC require a dishonest intention to deceive at the inception. Merely a breach of contract cannot give rise to criminal prosecution. The court also considered the delay in lodging the complaint and the nature of the dispute, concluding that it was more aligned with civil proceedings.
Final Decision: The court quashed the FIR in Crime No.650 of 2018 against the petitioners, allowing the Criminal Original Petition and closing the connected Miscellaneous Petition.
JUDGMENT
(Prayer: Criminal Original Petition is filed under Section 482 of the Code of Criminal Procedure, to call for the records relating to the FIR in Crime No.650 of 2018 on the file of the 1st respondent Police, Quash the same by allowing this Criminal Original Petition.)
This Criminal Original Petition has been filed to quash the FIR in Crime No.650 of 2018, dated 29.11.2018, on the file of the 1st respondent Police.
2. The 2nd respondent lodged a complaint to the Commissioner of Police, Police on 30.10.2018, which was forwarded to the 1st respondent Police on 01.11.2018. On the complaint, an FIR in Crime No.650 of 2018, for offence under Section 420 IPC, was registered against the petitioners on 29.11.2018.
3. The complaint is that the petitioners and the 2nd respondent are known to each other and they are devotees of Thirumoorthy Malai Swamigal. The petitioners 1 and 2 were running a business in the name and style of M/s.Xedon Media Private Limited at Gorimedu, Salem. The petitioners 1 and 2 were unable to repay the business loan obtained in City Union Bank, Erode Branch and they became defaulters. The petitioners 1 and 2 intended to get loan from Canara Bank, Gorimedu Branch, Salem by mortgaging the 1st petitioner-s father property, for which they had to show some bank transaction in the bank account maintaining in the name of M/s.Xedon Media Private Limited. Hence, the petitioners 1 and 2 approached the 2nd respondent on 01.03.2018 and asked them to deposit Rs.21,00,000/- in M/s.Xedon Media Private Limited bank account and thereafter, the same would be re-transferred to the 2nd respondent-s bank account. It is only an adjustment. Further, the petitioners 1 and 2 also promised to convey the property in favour of the 2nd respondent. For the above bank transaction, the 3rd petitioner was engaged by the petitioners 1 and 2 and the entire transaction was handled by him. Believing the same, the 2nd respondent gave Rs.21,00,000/- to his Manager Angamuthu and also gave his two Axis Bank account Nos.917030032895768 and 915030006267074 for the transaction, the said Angamuthu proceeded to Canara Bank, Gorimedu Branch, Salem. At about 10.30 a.m., Angamuthu handed over Rs.21,00,000/- to the 3rd petitioner, who received the cash, deposited the same in M/s.Xedon Media Private Limited bank account and gave NEFT slip showing that the amount of Rs.10,00,000/- transferred to the Axis bank account in No.91503006267074 and the balance amount of Rs.11,00,000/- transferred to the Axis bank account No.917030032895768. The amount of Rs.10,00,000/- was credited to the 2nd respondent-s bank account. As regards, the amount of Rs.11,00,000/- is concerned, the 3rd petitioner wrongly mentioned the last two digits of the 2nd respondent bank account number and thereby, the amount of Rs.11,00,000/- got re-credited to M/s.Xedon Media Private Limited bank account.
4. The CCTV camera in Canara Bank, Gorimedu Branch, Salem confirms the presence of the 2nd respondent-s Manager Angamuthu as well as the 3rd petitioner. Hence, the 2nd respondent lodged a complaint to the 1st respondent against the petitioners herein.
5. The learned counsel for the petitioners submitted that the petitioners 1 and 2 are husband and wife, the 3rd petitioner is their Manager. The petitioners are doing printing business in the name and style of M/s.Xedon Media Private Limited, Salem. The 2nd respondent is a Doctor-cum-Money Lender, he used to visit the office of the petitioners. In the course of said business conduct, the 2nd respondent offered loan to the petitioners 1 and 2 at a very low interest rate. Hence, the petitioners 1 and 2 borrowed a sum of Rs.1,02,00,000/- from the 2nd respondent. The said amount was transferred to through NEFT on 27.10.2017 from the bank accounts (Rs.51,00,000/- each from the Axis Bank accounts in Nos.917030032895768 & 915030006267074) of the 2nd respondent to M/s.Xedon Media Private Limited bank account maintained in City Union Bank, Erode and agreed for
AI
The judgment established that a mere breach of contract does not necessarily warrant criminal prosecution under Section 420 IPC, and emphasized the importance of a dishonest intention to deceive at t....
The court affirmed that an FIR under Section 420 IPC is not maintainable without prima facie evidence of dishonest intent or fraud, as mere contractual disputes do not constitute criminal cheating.
The main legal point established in the judgment is that the failure to fulfill contractual obligations can constitute cheating under Section 415 IPC if it causes harm to the other party.
Criminal liability can arise from civil disputes; allegations of fraud and conspiracy must be examined despite ongoing civil litigation.
The main legal point established in the judgment is the need for a full-fledged trial to examine complex financial transactions and allegations of document manipulation, emphasizing the applicability....
Point of law: Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations....
FIR quashed in loan-mortgage dispute lacking dishonest intent at inception or entrustment; 8-year delay, counterblast after civil suit render proceedings abuse of process, purely civil matter.
The distinction between civil disputes and criminal offences is crucial, with criminal liability requiring proof of dishonest intention from the outset, which was not established in this case.
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