1. This petition
under Section 482 of Cr. PC has been filed for quashing the proceedings
in C.C.No. 12 of 1999 on the file of the XI Metropolitan Magistrate,
Secunderabad wherein the petitioners are the accused and are prosecuted
for the of-fence under Section 420 of IPC on the basis of the complaint
filed by respondent No. 1 herein.
2. The relevant
facts may be stated briefly : The complainant has been running the business
in iron and steel at Boiguda. The complainant supplied stainless steel
material worth Rs. 3,65,000/-. Towards part payment of the same, accused
No. 2 who is the Managing Director of accused No. 1-M/s. Raman Tech
and Process Engineering Limited issued a cheque for an amount of Rs.
2,50,000/-. After issuing of cheque, accused No. 2 made certain part
payments towards remaining balance amount payable to the complainant.
On being asked to do so by accused No. 2, the complainant presented
the cheque in their Bank, namely, Vardhaman Mahila Co-operative Bank
for realisation of the amount on 7-5-1997 and the said cheque has been
sent back without realisation of the amount on the ground of 'insufficiency
of funds' on 8-5-1997. The complainant got issued a legal notice as
required under Section 138 of the Negotiable Instruments Act on 9-5-1997
which was received by the accused on 25-5-1997. But, neither amount
was paid nor any reply was sent. Under these circumstances, the complainant
filed a complaint for an offence under Section 138 of the Negotiable
Instruments Act which was numbered as C.C.No. 105 of 1997.
during the continuance of those proceedings, the complainant and the
accused entered into mutual settlement and an agreement was accordingly
entered into between the first accused represented by the 2nd accused
and the complainant firm on 27-10-1998 in the office of the first accused
at Hyderabad. Thus, the accused are said to have induced the complainant
to enter into that agreement. Under this agreement, the accused agreed
to pay the amount due in 12 monthly installments at the rate of Rs.
20,000/- per month either in cash or in equivalent value of stainless
steel pipes, sheets, shafts and the complainant in turn agreed to withdraw
the case and accordingly withdrew the case. According to the complainant,
after this agreement, the accused dishonestly and fraudulently avoided
the payment after withdrawal of the case from the Court. Thus, accordingly,
the complainant had committed the offence under Section 420 of IPC and
hence the impugned complaint.
4. The learned
counsel for the petitioners Sri Milind G. Gokhale submits that the learned
Magistrate erred in taking cognizance of offence under Section 420 of
IPC as the facts disclosed do not attract the said provision. It is
contended that there was no false representation on the part of the
accused. If the accused had committed any breach of terms of the agreement,
the complainant has a remedy under civil law based on the said breach
of contract and under no circumstances can it be said that the offence
under Section 420 of IPC has been made out.
5. On the
other hand, the learned counsel for respondent No. 1 Sri V. Shankar
Rao contends that the original promise made by the accused itself was
fraudulent and dishonest which was never intended to be kept and that
it is in pursuance of such dishonest misrepresentation that the complainant
has foregone his right to continue the prosecution of the accused and
withdrew the complaint which he would not have done but for such false
representation. The further contention is that this in fact was confirmed
by the breach of the agreement at the earliest inasmuch as the accused
failed to pay even the first installment as agreed to under the said
agreement. This however seems to be disputed question of fact inasmuch
as on behalf of the accused it is stated that they were willing to pay
the first installment by way of stainless steel material as provided
for under the agreement and that it was the complainant who refused
to accept the material.
6. The question
for consideration is whether the allegations in the complaint broadly
make out a case for an offence under Section 420 of IPC or not and whether
it is a case where under Section 482 of Cr. P.C. the proceedings in
the criminal case can be quashed?
7. The offence
alleged against the petitioners (accused) in this case is that of cheating
under Section 420 of IPC which reads as follows :
AND DISHONESTLY INDUCING DELIVERY OF PROPERTY :-
and thereby dishonestly induces the person deceived to deliver any property
to any person, or to make, alter or destroy the whole or any part of
a valuable security, or anything which is signed or sealed, and which
is capable of being converted into a valuable security, shall be punished
with imprisonment of either description for a term which may extend
to seven years and shall also be liable to fine.
8. For the
offence under Section 420 of IPC, the following are the ingredients
(i) The accused
must have cheated and thereby dishonestly induced the complainant;
(ii) to deliver
any property to any person or to make, alter or destroy whole or any
part of the valuable security or anything signed or sealed which is
capable of being converted into valuable security.
has been defined in Section 415 of IPC. For cheating, there must be
deceiving of any person and by so deceiving fraudulently or dishonestly
inducing the person deceived (a) to deliver any property, or (b) to
consent that person to retain any property, or (c) to do or omit to
do anything which he would not do or omit if he were not so deceived
and (d) which act or omission causes or is likely to cause damage or
harm to that person in body, mind, reputation or property.
9. In this
case it is alleged in the complaint that the accused has dishonestly
or fraudulently represented and induced the complainant to enter into
an agreement with false promise and thus retained dominion of an amount
of Rs. 2,25,000/-. The sum and substance of the allegations against
the accused in the complaint are that while the accused was facing prosecution
for an offence under Section 138 of the Negotiable Instruments Act,
he entered into settlement with the complainant and entered into an
agreement promising to repay the amount due in installments. It is this
promise, which induced the complainant to omit to prosecute the accused.
As stated above, it is the case of the complainant that the representation
of the accused that he will pay the amount in installments was made
dishonestly and fraudulently.
it cannot be said by mere reading of the complaint and accepting the
facts as they are that the element of cheating as defined in Section
415 of the IPC have not been made out.
11. It is
a question of fact whether as asserted by the complainant, the accused
had intentionally and dishonestly made false representation about payment
of the amount due in instalments as a pretence for dropping of criminal
proceedings against them or the original representation was not dishonest
though it was subsequently breached. As alleged by the complainant,
if the accused had dishonestly and fraudulently represented about the
payment of the amount due by instalments and by making such representation
induced the complainant from omitting to prosecute the accused for the
offence under Section 138 of the Negotiable Instruments Act, which obviously
he would not have omitted to do but for that representation, then the
element of cheating as defined in Section 415 of Cr. P.C. prima facie
can be said to be present.
12. It may
further be pointed out that mere cheating itself is punishable under
Section 417 of IPC which provides that whoever cheats shall be punishable
for imprisonment of either description for a term which may extend to
one year or a fine or both. Thus, as stated above, it is a question
of fact which requires determination during the trial whether the representation
of the complainant that he would make the payment' of the amounts due
was dishonest and fraudulent from the inception as alleged by the complainant
or whether the original representation was not so and subsequently there
was mere breach of contract.
whether the accused failed to pay the first instalment as alleged by
the complainant or it was the complainant who refused to accept the
material towards first instalment as stipulated under the agreement
is also a question of fact which has to be gone into during the trial.
14. It is
pertinent to note here that the act of withdrawal of the criminal proceedings
for the offence under Section 138 of the Negotiable Instruments Act
filed by the complainant against the accused in this case, prima facie
falls within the meaning "doing something or omitting to do something"
as mentioned in Section 415 of IPC. The version of the complainant that
the act of withdrawal of the complaint or omission to prosecute the
earlier complaint was induced by fraudulent and dishonest representation
of the accused that the amount due would be paid by instalments requires
determination in the light of the evidence produced before the trial
15. It is
not a case where it can be held that on the allegations as contained
in the complaint, no case of offence of cheating has been made out.
Further, it is for the trial Court to decide whether in the light of
the evidence produced, an offence under Section 417 of IPC is made out
or one under Section 420 of IPC is made out. I am not persuaded to hold
that this is a case where extraordinary powers of the Court under Section
482 of Cr PC can be exercised for quashing the proceedings.
16. It is
necessary to remind onself that while proceeding under Section-482 of
Cr PC, the allegations in the complaint cannot be subjected to meticulous
and microscopic examination to ascertain whether every part of the ingredient
of the offence alleged has been made out or not. If the broad allegations
prima facie show the commission of an offence, this Court will be loath
to interfere under Section 482 of Cr. P.C.
17. By way
of caution, it my however be mentioned that the comments made in this
order shall not be construed as any indication of findings on the question
of fact which the trial Court will have to determine on the basis of
the evidence produced during the trial.
18. In the
results the petition is dismissed.