For the offence of cheating under Section 420 IPC, the prosecution must establish dishonest inducement at the time of the transaction; in the absence of any allegation of fraud or inducement, criminal proceedings arising from a purely commercial transaction amount to an abuse of process and are liable to be quashed.

J U D G M E N T

B.R. GAVAI, J.

1. Leave granted.

2. The present appeal challenges the order dated 15th July 2022 passed by the learned Single Judge of the High Court of Judicature at Madras in Criminal O.P. No. 20716 of 2020 and Crl. M.P. No. 8763 of 2020, whereby the High Court rejected the petition filed by the present appellant under Section 482 of the Code of Criminal Procedure, 1973 (“Cr.P.C.” for short), to call for the records and to quash the First Information Report (“FIR” for short) registered as Crime No. 21 of 2020, on the file of SHO, District Crime Branch, Kancheepuram, in connection with the offence punishable under Section 420 read with 34 of the Indian Penal Code, 1860 (“IPC” for short).

FACTS

3. Shorn of details, the facts leading to the present appeal are as under:

3.1 The case of the prosecution is that, during the year 2016, accused No. 2-Suresh Prathaban, being a college friend, approached the complainant Karthick Krishnamurthy for some help to clear his hand loan. The accused No. 2 further told that he had business with accused No. 1-Lakshmanan, who is running a hotel and also doing real estate business. Upon the insistence of accused No. 2, the complainant had agreed to extend financial help to accused No. 1 to the tune of Rs.1,60,00,000/- for the business project(s) at Oragadam and around Kancheepuram District with condition to repay the same within 20 months with 100% profit.

3.2 Accordingly, the complainant transferred a sum of Rs.49,25,000/- on 18th March 2016, Rs.20,01,000/- on 31st May 2016, Rs.36,25,000/- on 13th June 2016, Rs.30,24,166/- on 8th July 2016 through RTGS and Rs. 24,25,834/- in cash to accused Nos. 1 and 2, totalling to the tune of Rs.1,60,01,000/- (though mentioned in complaint as Rs.1,60,00,000/-). To secure the same, accused No. 1 had executed a registered simple mortgage deed dated 18th March 2016 in favour of the complainant relating to 100 plots at Sumangali Village, Thiruvannamalai District, registered vide document No.768 of 2016 for Rs.1,00,00,000/-.

3.3 Thereafter, at the insistence of accused Nos. 1 and 2, the complainant entered into an unregistered memorandum of understanding and paid a sum of Rs.1,50,00,000/- and a further sum of Rs.50,00,000/- by RTGS and cheque to accused No. 1’s bank. In the said amount, the complainant directly transferred a sum of Rs.20,00,000/- in favour of the present appellant-A.M. Mohan (accused No.3). Further, accused No.1 also transferred a sum of Rs.1,80,00,000/- to the present appellant for the purchase of the land admeasuring 9.80 acres situated at Chittoor Village, Sriperumbudur Taluk. To secure the said payment of Rs.2,00,00,000/- with returns of Rs.10,00,00,000/-, accused No. 1 executed a registered deed of General Power of Attorney (“GPA” for short) dated 3rd February 2017, in favour of the complainant, vide document No. 3733/2017, in respect of the above said land and also executed a registered sale deed relating to the land admeasuring 2.52 acres situated at Vellarai Village, Kancheepuram District vide document No.386/2017 dated 9th February 2017 in favour of the complainant.

3.4 The accused No. 1 also executed a mortgage deed for land admeasuring 2.14 acres at Sunguvarchatram Village (though mentioned in the complaint as ‘a registered Agreement