Mens rea must be established for cheating under IPC; mere breach of contract does not constitute cheating.

ORDER

The petitioners are the accused in Crime No.454 of 2022 registered by the Thampanoor Police Station, Thiruvananthapuram, for allegedly committing the offences punishable under Sections 420 , 406, 468 and 120B read with Section 34 of Indian Penal Code .

2. The gist of the prosecution case is that, the 2^nd respondent had availed an insurance policy from the Life Insurance Corporation of India (‘LIC’ for brevity) on 28.12.2005 for an assured value of Rs.2,00,000/-, on payment of an annual premium of Rs.22,667/-. The policy was due to mature on 28.12.2020. Even though the 2^nd respondent paid premium for four years, the accused paid the 2^nd respondent only Rs.26,800/- towards the maturity value. Thus, the accused persons have committed the above offences.

3. I have heard the learned Counsel for the petitioners, the learned Public Prosecutor and the learned Counsel appearing for the 2^nd respondent.

4. The learned Counsel for the petitioners submit that, it is not disputed that the 2^nd respondent had availed an insurance policy from the LIC for an assured value of Rs.2,00,000/-. However, the 2^nd respondent had paid premium for four years at the rate of Rs.22,667/- for each year. After that, he defaulted the payment of the premium. On 06.07.2009, the 2^nd respondent also availed a loan for Rs.46,500/- on the policy. After that, he surrendered the policy on 28.12.2009 for Rs.11,500/-. However, as there was a mistake in repayment of the surrender value to a wrong person, the LIC reinstated the policy. Nonetheless, the 2^nd respondent did not pay any further premium. Finally, on the policy getting matured on 28.12.2020, the maturity value of Rs.26,800/- was paid to the 2^nd respondent. Immediately, the 2^nd respondent filed a complaint before the Police, who refused to register a crime. Then the 2^nd respondent filed a private complaint, which was referred under Section 156 (3) Cr.P.C. and Annexure A7 FIR was registered. However, the Investigating Officer has filed Annexure A9 report, stating that the crime is undetected. Even if the allegations in the FIR are take on their face value, the same will not attract the offences alleged against the petitioners, as the accused did not have the mens rea to cheat the 2^nd respondent. In any given case, the 2^nd respondent has been paid the maturity amount due to him as per the policy. The dispute is purely civil in nature. Therefore, the entire proceedings may be quashed.

5. The learned Public Prosecutor and the learned Counsel appearing for the 2^nd respondent oppose the Crl.M.C. They submit that, if the allegations in Annexure A7 FIR are taken in their face value, the same would attract the offence under Sections 406 and 420. The contentions raised in the Crl.M.C are matters to be decided after trial. Therefore, this Court may not embark on a mini trial and quash the proceedings. Hence, the Crl.M.C may be dismissed.

6. The 2^nd respondent’s specific case is that, he had availed an insurance policy with assured value of Rs.2,00,000/-.

7. It is undisputed that the 2^nd respondent had only paid premium of Rs.22,667/- for four years. Subsequently, he also availed a loan for Rs.46,500/-. On the policy getting matured, the 2^nd respondent was also paid Rs.26,800/-. Thus, it cannot be said that the 2^nd respondent was only paid Rs.26,800/- alone.

8. It is well settled that, in order to attract an offence under Section 420 , it is to be established that the accused persons had the mens rea to cheat the victim (defacto complainant) at the very inception of the contract.

9. In the case of Vesa Holdings (P) Ltd. and Another v. State of Kerala and others [ (2015) 8 SCC 293 ], the Hon’ble Supreme Court has held