The intention of the accused at the time of the alleged inducement is crucial in determining whether the act constitutes cheating or mere breach of contract.

JUDGMENT :

K.P. Mohapatra, J. - In this petition u/s 482 of the Code of Criminal Procedure ('Code' for short) the Petitioners, who are accused in I.C.C. Case No. 337 of 1983 of the court of the Chief Judicial Magistrate, Cuttack, have challenged the order of cognizance of an offence u/s 420 of the Indian Penal Code ('I.P.C.' for short).

2. Facts in brief as stated in the complaint petition are narrated. The opposite party is a wholesale dealer of cloth having his shop premises at Choudhury Bazar. The Petitioners related as father and son respectively belong to Coach Behar in West Bengal and carryon business in textile goods. Generally they visit important places, purchase different varieties of cloth from wholesale dealer and sell the goods in exhibitions and in this process they earn huge profits within a short time. They came to Cuttack for the purpose of exhibition and sale of textile goods sometime in December 1983 and stayed in Hotel Lords at Haripur Road, where in the foyer they opened an exhibition shop of textile goods. On 3.12.1983 they approached the opposite party and wanted to purchase cloth on credit promising that every night they will make payment of Rs. 1000/- to him. With this understanding, they purchased cloth worth Rs. 42,602/- on credit from the opposite party on the basis of a credit memo and on the very day paid a sum of Rs. 1000/-. Thereafter, on 4.12.1983, 5.12.1983, 6.12.1983 and 7.12.1983 instead of paying Rs. 1000/- daily, they paid Rs. 125/- to the opposite party on each day pleading that there was slump in sale. In the evening of 8.12.1983 when the opposite party went to Hotel Lords to collect money, he found to his utter surprise that the Petitioners had vanished with the textile goods. He understood that in the night of 7.12.1983 they left the hotel with the unsold clothing a matador mini bus and headed towards Berhampur. The opposite party proceeded to Berhampur, but did not find them. He made a search for them, but to no avail. On enquiry, he learnt that the Petitioners had purchased goods on credit from several other dealers, but had not pard the price. A sum of Rs. 41,102/- remained outstanding against them after deduction of Rs. 1500/- which they had paid. The opposite party felt cheated and so filed the complaint petition alleging that the Petitioners had committed offence under Sections 406 and 420 I.P.C. After recording the initial statement of the opposite party and on consideration of the facts stated in the complaint petition, as well as the credit memo, the learned Chief Judicial Magistrate took cognizance of an offence udder Section 420 I.P.C. against the Petitioners and issued process.

3. Learned Counsel appearing for the Petitioners urged that the case was of civil nature and not cognizable by the criminal court. It was open to the opposite party to institute a suit against the Petitioners for recovery of the dues. Ingredients of the offence of cheating are wholly absent. Therefore, even if the facts stated in the complaint petition are accepted as a whole, a prima facie case u/s 420 I.P.C. has not been made out and if the case proceeds there shall be abuse of the process of the court and gross miscarriage of justice. So, this is a fit case for quashing the impugned order of cognizance in exercise of inherent powers u/s 482 of the Code.

4. The offence of cheating u/s 420 in terms of the definition Section 415, I.P.C. has two essential ingredients;

(i) deceit dishonest or fraudulent misrepresentation and

(ii) the inducing of that person to deliver property.

The deception must be with a dishonest and fraudulent intent. Cheating amounts to inducing the victim to enter into a bargain, which he would not enter into, if he knew the real facts. Unless criminal intention of the accused, when the offence was committed, is established, no offence of cheating can be said to have been committed. A few decisions cited at the Bar may, however, be noticed.

5. In Shivnarayan Kabra Vs. The State of Madras