Criminal prosecution for cheating requires proof of fraudulent intent at the time of the transaction; mere failure to fulfill a contractual obligation does not suffice.

O R D E R

This Criminal Miscellaneous case is filed to quash Annexure-B FIR and all further proceedings in Crime No.

267/2018 of Kunnamkulam Police Station, Thrissur Rural.

The petitioners are the accused Nos. 1 to 4 respectively in Crime No. 267/2018 of Kunnamkulam Police Station. The above case is registered alleging offences punishable under Secs. 420, 422 r/w 34 IPC . The case is registered based on a private complaint preferred by the 2nd respondent before the Judicial First Class Magistrate Court, Kunnamkulam, which was forwarded under Sec.156 (3) Cr.P.C.

2. The case of the defacto complainant in the private complaint which leads to the registration of the FIR is as follows :

Accused Nos. 1 to 4 acquainted with the defacto complainant and during the period between 25.07.2012 to 26.06.2014 obtained a total amount of Rs.1,70,00,000/- from the defacto complainant on a promise to pay him interest for the amount and further cheques were also issued towards the liability. According to the defacto complainant, the accused after receiving the total amount as aforesaid on different occasions failed to repay the amount and interest promised and thereby cheated the defacto complainant. Annexure-A is the private complaint and Annexure-B is the FIR. According to the petitioners, even if the entire allegations are accepted, no offence is made out. Hence, this Criminal Miscellaneous case is filed.

3. Heard the learned counsel for the petitioners and the learned Public Prosecutor. I also heard the learned counsel appearing for the 2nd respondent.

4. According to the petitioners, Annexure-A complaint and consequential Annexure-B FIR does not make out any criminal offence against the accused. According to the petitioners, allegation at best, reveal a monetary transaction between the parties. It is also submitted that in Annexure-C notice, a detailed narration of the transaction between the parties have been made and it is explicitly stated that the cheques in question were issued along with several other security documents as security for the amount lend. It is submitted that the 2nd respondent is running money lending business. The further submission is that in Annexure-C, it was specifically averred that the liability due with interest has been cleared by the accused, but still the security documents including the cheques were not returned. It is also submitted that a perusal of Annexure-B would show that the cheque and the other documents have been received by the money lending establishment of the 2nd respondent. It is also submitted that about 16 complaints under Sec. 138 of the Negotiable Instruments Act have been initiated against the accused by the 1st respondent making use of the blank signed cheque leaves issued as security, at the time of obtaining the loan. Hence, it is submitted that the continuation of the criminal prosecution is an abuse of process of court. The counsel for the 2nd respondent submitted that only FIR is registered and this Court may not interfere with the criminal investigation.

5. This Court considered the contentions of the petitioners and the respondents. This Court perused Annexures A and B. A perusal of the documents would show that it is only a money transaction. The admitted case of the 2nd respondent is that an amount of Rs.1,70,00,000/- is obtained by the defacto complainant on a promise to pay him interest for the amount and the amount is not paid. Whether the same amounts to an offence under Sec. 420 IPC is the question.

6. The Apex Court in Subbiah C @ Kadambur Jayaraj v. Superintendent of Police [2024 KHC 6288] observed that a civil litigation cannot be converted to criminal prosecution. The relevant portion of the above judgment is extracted hereunder :

40. “The complainant has clearly alleged that the accused caused him monetary loss because the appropriate share of profits was not passed on to him after some plots from the entire chunk had been sold. This Court in the case of Sarabjit Kaur v. S