THE HONOURABLE SMT JUSTICE JUVVADI SRIDEVI CRIMINAL PETITION No.1617 OF 2022

O R D E R

This Criminal Petition is filed by the petitioners-

accused Nos.1 and 2 seeking to quash the proceedings against them in C.C.No.1013 of 2021 pending on the file of learned Judicial First Class Magistrate at Bhadrachalam, registered for the offences under Sections 420, 323, 294(b), 506 read with 34 of the Indian Penal Code (for short ‘IPC’).

02. Heard Sri C.Sharan Reddy, learned counsel for the petitioners and Sri P.V.Ramana, learned counsel for the unofficial respondent No.1 as well as Smt.S.Madhavi, learned Assistant Public Prosecutor for the State-respondent No.2. Perused the record.

03. Brief facts of the case are that the complainant along with her husband residing in one portion of their daughter’s house bearing No. 9-1-112/4 and they were using the remaining portions for rental basis. The petitioners-accused Nos.1 and 2 were inducted as tenants and developed acquaintance with the complainant and her husband. Due to the said acquaintance, the petitioners-accused Nos.1 and 2 made them to believe that if they invest their assets and shares, the petitioners/accused Nos.1 and 2 will pay Rs.2/- as interest. For which, both the complainant and her husband on different dates gave Rs.19,00,000/- to the petitioners-accused Nos.1 and 2. Thereafter, for a period of six months, both the accused paid interest amount to the complainant. Subsequently, they reduced the interest rate from Rs.2/- to Rs.1.50 and paid amounts for a period of four months. The petitioners-accused Nos.1 and 2 used to run finance business with high rate of interest. On 19.08.2020, the complainant demanded the petitioners- accused Nos.1 and 2 to repay her amount, for which, petitioners-accused Nos.1 and 2 have repaid Rs.5,00,000- 00 and assured of returning the remaining amount on or before 31.03.2021. Thereafter, the petitioners-accused Nos.1 and 2 vacated the house of the complainant. Complainant and her husband went to the petitioners- accused Nos.1 and 2 and demanded to repay their amount, for which, accused Nos.1 and 2 beat, abused in most filthy language and threatened them with dire consequences.

04. Learned counsel for the petitioners submitted that the petitioners are nothing to do with the alleged offences. There is no dishonest intention on the part of the petitioners-accused Nos.1 and 2. Mere failure to repay the loan amount would not amount to criminal offence of cheating. There is no element of cheating from the beginning of the transaction. There is no medical evidence. There is no fraudulent intention on the part of the petitioners/accused Nos.1 and 2 to cheat the complainant. All the allegations levelled against the petitioners-accused Nos.1 and 2 are purely civil in nature and the respondent No.1-complainant is trying to convert the civil dispute into a criminal dispute.

05. With the above submissions, learned counsel for the petitioners-accused Nos.1 and 2 while praying for the quashment of criminal proceedings relied upon a decision of the Honourable Supreme Court of India in Sathishchandra Ratanlal Shah vs. State of Gujarat and Another, (2019) 9 SUPREME COURT CASES 148, wherein it was held at Paragraph No.13 that:

“13. Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168). In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent no. 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent no. 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution