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SUPREME COURT OF INDIA
(From the High Court of Calcutta)
S. ABDUL NAZEER, KRISHNA MURARI, JJ.
Vijay Kumar Ghai & Ors. – Appellants
VERSUS
The State Of West Bengal & Ors. - Respondents
Criminal Appeal No. 463 of 2022 (arising out of S.L.P (Crl.) No. 10951 of 2019)
Decided on : 22-03-2022
(A) Indian Penal Code, 1860 – Sections 405, 415 and 420 – Criminal breach of trust and cheating – “Entrustment” of property under Section 405 of Indian Penal Code, 1860 is pivotal to constitute an offence under this – A person who dishonestly misappropriates property entrusted to them contrary to terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of IPC – There is no good reason to restrict meaning of word ‘property’ to moveable property only when it is used without any qualification in Section 405 – Similarly, a fraudulent or dishonest inducement is an essential ingredient of offence – A person who dishonestly induces another person to deliver any property is liable for offence of cheating – Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities – This section is also applicable to matters where destruction of property is caused by way of cheating or inducement. (Paras 24, 25, 28 and 30)
(B) Indian Penal Code, 1860 – Sections 420, 406 and 120B – Criminal Procedure Code, 1973 – Section 482 – Cheating, criminal breach of trust and conspiracy – Offence by company – Complaint filed in Kolkata was a reproduction of complaint filed in Delhi except with change of place occurrence in order to create a jurisdiction – Multiple complaints by same party against same accused in respect of same incident is impermissible – Mere breach of contract is not in itself a criminal offence and gives rise to civil liability of damages – Distinction between mere breach of contract and cheating, which is criminal offence, is a fine one – While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of offence of cheating – In case at hand, complaint filed by Respondent No. 2 does not disclose dishonest or fraudulent intention of Appellants – It cannot be said that averments in FIR and allegations in complaint against appellant constitute offence under Sections 405 & 420 IPC, 1860 – Even in a case where allegations are made in regard to failure on part of accused to keep his promise, in absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out – In instant case, there is no material to indicate that Appellants had any malafide intention – Timeline of filing complaints clearly indicates malafide intention of Respondent No. 2 which was to simply harass petitioners so as to pressurise them into shelling out investment made by Respondent No. 2 – Registering a complaint in Kolkata is way of harassing appellant as a complaint has already been filed in Delhi with all necessary facts, apart from jurisdictional issue at Kolkata – In order to attract ingredients of Section of 406 and 420 IPC it is imperative on part of complainant to prima facie establish that there was an intention on part of petitioner and/or others to cheat and/or to defraud complainant right from inception – It has to be prima facie established that due to such alleged act of cheating complainant (Respondent No. 2 herein) had suffered a wrongful loss and same had resulted in wrongful gain for accused(appellant herein) – In absence of these elements, no proceeding is permissible in eyes of law with regard to commission of offence punishable u/s 420 IPC – Impugned order passed by High Court set aside – Impugned FIR and proceedings in file of CMM, Kolkata, West Bengal in pursuance of charge-sheet against appellants for offences under Section 406, 420, 120B IPC stands quashed. (Paras 10, 11, 34, 36, 38, 39, 42 and 43)
Facts of the case:
Present appeal is directed against the judgment and order dated 01.10.2019 passed by the High Court of Calcutta in C.R.R No. 731 of 2017 filed by appellants praying for quashing of proceedings being G.R. Case No. 1221 of 2013 pending before Court of Learned Chief Metropolitan Magistrate, Kolkata and arising out of Bowbazar Police Station Case No. 168 dated 28.03.2013 under Sections 420, 406 and 120B of Indian Penal Code, 1860. By the said judgment, the High Court dismissed the prayer for quashing of the proceedings and held that continuance of criminal proceedings against the present appellant/accused would not be an abuse of process of the court.
Findings of Court:
The order of the High Court is seriously flawed due to the fact that in its interim order dated 24.03.2017, it was observed that the contentions put forth by the Appellant vis-à-vis two complaints being filed on the same cause of action at different places but the impugned order overlooks the said aspect and there was no finding on that issue.
Result : Appeal allowed.
भारतीय दंड संहिता (आईपीसी) में धारा 406 (आपराधिक विश्वासघात) और धारा 420 (धोखाधड़ी) को एक ही मामले में एक साथ लगाना कानूनी रूप से गलत माना जाता है। दोनों अपराधों के मूल तत्व (ingredients) आपस में विरोधाभासी हैं, इसलिए वे एक साथ नहीं चल सकते। नीचे सरल शब्दों में कारण समझाए गए हैं। (!) (!) [1000754470022][1000754470026]
विरोधाभास (mutually exclusive): | धारा 406 | धारा 420 | |---------------------------|---------------------------| | शुरू में विश्वास (entrustment) होता है। | शुरू से धोखा (no trust from beginning)। | | संपत्ति भरोसे पर सौंपी जाती है। | संपत्ति धोखे से निकाली जाती है। | | बेईमानी बाद में आती है। | बेईमानी शुरू से मौजूद। |
अगर शुरू से धोखा था (420), तो विश्वास का सौंपना (entrustment) ही नहीं हो सकता (406 के लिए जरूरी)।
निष्कर्ष: ये दोनों अपराध एक ही लेन-देन में एक साथ नहीं बन सकते, क्योंकि एक में विश्वास की शुरुआत और दूसरे में धोखे की शुरुआत जरूरी है। गलत तरीके से लगाने पर एफआईआर या कार्यवाही रद्द हो सकती है। (!) [1000754470033][1000754470035]
JUDGMENT :
Krishna Murari, J.
Leave granted.
2. This appeal is directed against the judgment and order dated 01.10.2019 passed by the High Court of Calcutta (hereinafter referred to as “High Court”) in C.R.R No. 731 of 2017 filed by the appellants praying for quashing of proceedings being G.R. Case No. 1221 of 2013 pending before the Court of Learned Chief Metropolitan Magistrate, Kolkata and arising out of Bowbazar Police Station Case No. 168 dated 28.03.2013 under Sections 420, 406 and 120B of the Indian Penal Code, 1860 (hereinafter referred to as “IPC”). By the said judgment, the High Court dismissed the prayer for quashing of the proceedings and held that continuance of criminal proceedings against the present appellant/accused would not be an abuse of the process of the court.
3. Brief facts necessary for the disposal of this appeal are as under:
3.1 M/s. Priknit Retails Limited a public limited company having its registered office at BXXV, 539A, 10, Jalandhar, Bye Pass Road, Ludhiana, Punjab was incorporated in the year 2002 and subsequently changed its name to Priknit Apparels in 2007. The company is engaged in the manufacture and trade of apparels through chain of retail stores under the brand name and style of Priknit. Appellant No. 1 is the Managing Director of the Company and Appellant Nos. 2 and 3 are the Directors of the said Company. The company has been arrayed as proforma Respondent No. 3.
3.2 In January 2008, Respondent No.2 an authorized representative of SMC Global Securities Ltd, Delhi desired to make an investment on its behalf with the appellants. It was mutually decided between the parties that Respondent No. 2 will invest an amount of Rs. 2.5 crore with the company in lieu of which they will be issued 2,50,000 equity shares of Priknit Apparel Pvt. Ltd. Subsequently, Respondent No. 2 filed their share application form along with the cheque of Rs. 2.5 crore.
3.3 Subsequently, an allotment letter dated 29.03.2008 was issued in favour of Respondent No. 2 whereby 2,50,000 shares were issued in lieu of the investment made by him. The proforma respondent no. 3 company and Respondent No. 2 arrived at an understanding, regarding the investment made by Respondent No. 2.
3.4 Having failed to bring the I.P.O as per memorandum of understanding dated 20.08.2009, Respondent No. 2 issued a legal notice dated 06.12.2011 to the Appellants, who duly replied to the legal notice denying all the allegations contained in the legal notice.
3.5 That on 06.01.2012, Respondent No. 2 filed a police complaint with PS Rajender Nagar, New Delhi and the concerned officer of PS Rajender Nagar apprised Respondent No. 2 that the complaint does not pertain to their jurisdiction and therefore the same ought to be transferred. On 11.04.2012, Respondent No. 2 filed a complaint with the Economic Offences Wing (hereinafter referred to as “EOW”) and the said complaint was transferred to PS Darya Ganj, New Delhi.
3.6 That on 06.06.2012, Respondent No. 2 filed a complaint being CC No. 306/1/12 under Section 156(3) of Cr.P.C before the Tiz Hazari Court, New Delhi for registration of FIR against the Appellants and their company. On 01.09.2012, Respondent No. 2 also filed another Complaint No. 190 of 12 before Tis Hazari Court, New Delhi under Section 68 of the Companies Act read with Section 200 of Cr.P.C which is pending adjudication.
3.7 That the Metropolitan Magistrate (hereinafter referred to as “MM”), Tis Hazari vide order dated 28.02.2013 observed that the entire dispute raised by Respondent No. 2 was civil in nature and there was no criminality involved, thereby turning down the prayer of Respondent No. 2 for registration of an FIR and posted the case for pre-summoning evidence with regard to the application under Section 156(3) Cr.P.C filed by Respondent No.2. It is pertinent to mention here that the order of the MM, Tis Hazari Court, New Delhi attained finality as it was not put to further challenge.
3.8 That on 28.03.2013, Respondent No. 2 filed a s
(1) Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities.(2) While breach of cont....
Power under Section 156(3) warrants application of judicial mind. A court of law is involved. It is not the police taking steps at the stage of Section 154 of the Code.
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