HIGH COURT OF ALLAHABAD
J.K.Mathur
S C KAKAR
Versus
STATE OF U P
Decided On : 09 April 1994
Criminal Misc. Case No. 165 of 1994
CHEATING - SECTION 420, I. P. C. - SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT - DISTINCTION - OFFENCE UNDER SECTION 420, I. P. C. REQUIRES DISHONEST INTENTION - MERE ISSUANCE OF CHEQUE WHICH BOUNCES DUE TO INSUFFICIENT FUNDS NOT SUFFICIENT.
Fact of the Case:
Petitioner challenged the First Information Report (FIR) lodged against him for allegedly issuing a cheque for Rs. 1895.70 on 7-8-1993, which was returned due to insufficient funds. The petitioner argued that the appropriate remedy was prosecution under Section 138 of the Negotiable Instruments Act and not Section 420 of the Indian Penal Code (IPC).
Finding of the Court:
The court held that the offence under Section 138 of the Negotiable Instruments Act and Section 420 of the IPC are distinct. Section 138 deals with the issuance of a cheque for which there were insufficient funds, while Section 420 requires a dishonest intention to cheat at the time of receiving property and issuing a cheque knowing that it would be dishonored.
Issues: 1. Whether the issuance of a cheque that bounces due to insufficient funds constitutes cheating under Section 420 of the IPC? 2. Whether the allegations in the FIR disclosed a dishonest intention on the part of the petitioner to cheat the informant?
Ratio Decidendi: The court reasoned that merely issuing a cheque that bounces due to insufficient funds does not amount to cheating under Section 420 of the IPC. There must be an intention to cheat at the time of issuing the cheque, which was not alleged in the FIR. The court also noted that the informant's statement during the investigation did not attribute any dishonest intention to the petitioner.
Final Decision: The court allowed the petition and quashed the proceedings pending against the petitioner in the trial court for the offence under Section 420 of the IPC.
This petition under Section 482, Cr. P. C. seeks quashing of the proceedings pending in the Court of Xllth Addl. Chief Judicial Magistrate, Lucknow consequent to the charge-sheet filed on 11-2-1994.
2. The First Information Report was lodged by the opposite party No. 5 against the petitioner on 21-9-93 at Police Station Hussain Ganj, Lucknow. The petitioner chal lenged that Report in Writ Petition No. 5547 (M/b) of 1993 and an interim order was passed on 9-12-1993 by which the arrest of the petitioner was stayed. After conclusion of the investigation, a charge-sheet appears to have been filed in the Court of Xllth Addl. Chief Judicial Magistrate, Lucknow. The proceedings consequent to the said charge-sheet have been challenged by this petition.
3. Opposite Party No. 5 appeared in this Court through Counsel on 16-3-1994 and was granted two weeks time for filing counter-affidavit, on 12-4-1994 the case was listed again, being the date fixed on 16-3-1994. The opposite party No. 4 did not appear. No counter-affidavit has been filed.
I have heard learned Counsel for the petitioner.
4. The main contention raised on behalf of the petitioner firstly was that in the case where a cheque has been dis-honoured, the appropriate remedy lays in the prosecution for the offence under Section 138 of the Negotiable Instruments Act and not a prosecu tion under Section 420, I. P. C. It was also urged that in any view of the matter allegation, as contained in the First Information Report, did not make out any offence under Section 420, I. P. C.
5. The first contention raised on behalf of the petitioner is not tenable. The offence under Section 138, rests on the issuance of a cheque for payment of which there was no money available in the Account and the cheque was dis-honoured while the requirement of an offence under Section 420, I. P. C. is entirely different. Under the provisions of Section 420, I. P. C. a person may be punished in case he dis- honestly induces a person to deliver property to any person, or to make, alter or destroy any valuable security or part of it or any document which is capable of being converted into a valuable security.
6. While in offence under Section 138 of the Negotiable Instruments Act, there may not be any guilty intention to cheat at the time of issuance of a cheque, the offence under Section 420, I. P. C. can be committed only if there is an intention to cheat at the time when a person receives any property and issues a cheque knowing that it would be dis-honoured. These two offences are, therefore, essentially different and the petitioner cannot claim that because the Act alleged may be an offence under Section
138 of the Negotiable Instruments Act, he may not be prosecuted for the offence under Section 420, I. P. C.
7. Considering the second contention, raised on behalf of the petitioner, a perusal of the First Information Report goes to show that the petitioner gave a cheque for Rs. 1895. 70 on 7-8-1993 which was a part of the salary of the petitioner for the month of July, having paid the remaining amount of Rs. 500/- in cash. This cheque was returned with a remark that there were insufficient funds. On being intimated, the petitioner again asked the informant to deposit the cheque in the bank. He again sent it to the bank which returned the cheque again on 30-8-1993 saying that three was not money in the account.
8. It can be assumed that by issuing cheque, the opposite party No. 5 induced the petitioner to permit the opposite party No. 5 to retain the part of salary the amount of which was mentioned in the cheque and that constituted one component of the offence of cheating as defined in Section 415, I. P. C. but it had additionally to be shown that it was done by deceiving the petitioner and fraudulently or dishonsetly.
9. Unless the petitioner was alleged to have delivered the cheque knowing that it would be dis- honoured and with the intention to wrongful gain or to cause wrongful loss,
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