The main legal point established in the judgment is that fraudulent and dishonest acts at the inception are essential for constituting cheating under Section 420 IPC.

JUDGMENT :

RAVINDRA MAITHANI, J.

1. The challenge in this petition is made to order taking cognizance/summoning order dated 08.11.2018, passed in Case No. 14919 of 2018, State vs. Daya Shankar Sharma and Others, by the court of Chief Judicial Magistrate, Haridwar (“the case”) by which the petitioners have been summoned to answer accusation under Section 420 IPC, as well as the entire proceedings of the case.

2. Heard learned counsel for the parties and perused the record.

3. The case is based on an FIR lodged by the respondent no. 4, the informant. Briefly stated, according to the informant, he was the Manager in a firm called the Goel Lightings (“the firm”) of which the respondent no. 3, Rakesh Goel is the proprietor. The petitioner nos. 3 and 4 were the Directors of JBS Engineering Works (“the company”). Their representative was petitioner no. 1, D.S. Sharma. In the year 2016, the petitioner no. 1 approached the owner of the firm and offered to sell the land and building of the company. It was also assured that the company will get its matter settled under One Time Settlement Scheme (“OTS”) with the Bank of Baroda (“the Bank”) and, thereafter, transfer all the land and building of the company. Pursuant to this assurance, the owner of the firm, the respondent no. 3, gave various amounts in the name of the company so that the petitioners may clear their dues in terms of OTS. But, according to the FIR, subsequently, the informant came to know that, in fact, the Bank had proceeded to auction the properties of the company. The FIR records that the informant has been cheated.

4. It is this FIR, in which after investigation, charge-sheet was submitted under Section 420 IPC against the petitioners, which is the basis of the case and, in which cognizance order was taken and petitioners have been summoned. It is impugned herein.

5. It is the case of the petitioners that the company was under a liability to pay its dues to the Bank. They were in the process of augmenting their resources. Therefore, they entered into an agreement with the firm so that the dues of the Bank may be paid by the company, and, thereafter, the lands and properties of the company may be handed over to the firm. In pursuance to the agreement, money was given by the firm, which was deposited in the Bank account. But, subsequently, according to the petitioners, since the firm did not pay all the money due under the agreement, so as to enable the company to settle its claim with the Bank, the Bank proceeded against the properties.

6. It is the case of the petitioners that they never cheated the informant or the owner of the firm. According to the petitioners, in fact, it is the inaction of the informant and owner of the firm in not paying the remaining dues under the agreement that the company could not clear its dues under the OTS, as approved by the Bank.

7. State, as well as the respondent nos. 3 and 4, both have filed their counter affidavits. According to the respondent nos. 3 and 4, they have been cheated by the petitioners. According to the respondent nos. 3 and 4, total Rs. 95 Lakhs were taken by the petitioners. It is the case of the respondent nos. 3 and 4 that the petitioners had dishonest intention since inception. They did not get OTS from the Bank, despite receiving Rs. 95 Lakhs from the respondent nos. 3 and 4.

8. State has also filed its counter affidavit, thereby, supporting the charge-sheet.

9. Learned Senior Counsel for the petitioner would submit that it is a case purely civil in nature. He would raise the following points in his submission:

(i) The company was under liability to pay its dues to the Bank. Therefore, the company entered into an agreement with the firm on 24.08.2016 with the following stipulations:

2. That the total consideration as in Para 1 above shall be payable to the Transferor/seller as under:

(a) Rs. 40,00,000/- (Rupees Forty Lacs only) has been paid vide Ch. No. 813643 Dated 24.8.2016 of Tamil Nadu Mercantile Bank Limited, Delhi.

(b) Ba