The absence of specific allegations of dishonest intent at the time of cheque issuance negates the establishment of an offense under S.420, IPC.

1. This petition under S.482 of the Code of Criminal Procedure seeks to quash crime No. 12/2001 of Begumpet Police Station, Secunderabad, which was referred to it by the learned XI Metropolitan Magistrate, Secunderabad.

2. The brief averments in the complaint which are necessary for the disposal of the petition are that the petitioners are doing business of selling all kinds of electronic items, that the petitioners are dealers of the 1st respondent - company, that the petitioners used to purchase various electronic items from the 1st respondent - company on credit facility, that the petitioners, in discharge of certain dues to the 1st respondent - company, issued a cheque bearing No. 571379, dated 15-5-1998, for a sum of Rs. 50,000/- drawn on United Bank of India, Secunderabad Branch, Secunderabad, signed by the 2nd petitioner in the capacity of the proprietor of the 1st petitioner, that on the confirmation given by the petitioners that the cheque would be honoured on its presentation, the 1st respondent - company presented the cheque with its bankers, but the cheque was returned unpaid with the endorsement, 'account closed', that the petitioners by making a false promise cheated the 1st respondent by not making payment, and that therefore the petitioners are liable for an offence under S.420, IPC. The complaint was referred to the police by the learned Magistrate under S. 156(3), CrPC on the basis of which the offence in question came to be registered under S.420, IPC.

3. Learned counsel for the petitioners contended that no specific overt acts are attributed to the petitioners which constitute any offence, much less an offence under S.420, IPC, and that the petitioners requested the 1st respondent to return all the cheques which were issued by them to the complainant in pursuance of a settlement between the parties on 2-1-1998. Learned counsel for the 1st respondent contended that the notice issued by the petitioners to the 1st respondent does not relate to the presentation of the cheque in question and the legal notice, dated 8-6-1998, got issued by the petitioners to the 1st respondent through their Advocate does not say anything about the cheque in question, and that the allegation of the 1st respondent is that by making false promise, the petitioners made the 1st respondent part with the goods manufactured by it, which allegations squarely fall under S.420, IPC, and that therefore, there are no grounds to quash the proceedings. He relied upon OPTS Marketing (P) Ltd. v. State of A.P., 2001 (1) Andh LD (Cri) 312 : 2001 CriLJ 1489 (FB).

4. In order to constitute an offence of cheating under S. 420, IPC, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent intention at the time of making the promise to say that he committed an act of cheating. A mere failure to keep up promise cannot be presumed as an act leading to cheating.

5. In OPTS Marketing (P) Ltd. (2001 Cri LJ 1489) (supra) a Full Bench of this Court held in para 29(ii) as follows :
"Even after introduction of S.138 of the Negotiable Instruments Act , prosecution under S.420, IPC is maintainable in case of dishonour of cheques or postdated cheques issued towards payment of price of the goods purchased or hand loan taken, or in discharge of an antecedent debt or towards payment of goods supplied earlier, if the charge - sheet contains an allegation that the accused had dishonest intention not to pay even at the time of issuance of the cheque, and the act of issuing the cheque, which was dishonoured, caused damage to his mind, body or reputa