THE HONOURABLE SRI JUSTICE K.C. BHANU         
CRIMINAL PETITION NO. 1041 OF 2001    

 DECIDED ON 24/02/2003

M/S.SIDDARTHA ELECTRONICS  REP. BY ITS PROPRIETOR,    

SRI.GIRISH MEHTA, SHOP NO.1,2 3,    PARADISE COMPLEX, PRENDERGHAT   ROAD, SECUNDERABAD       

AND ANOTHER.   

petitioner

M/S.VIDEOCON INTERNATIONAL  LIMITED, A COMPANY REGISTERED    

UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE,  ADALAT ROAD, AURANGABAD AND ALSO HAVING ITS AREA OFFICE AT  HYDERABAD, REP. BY ITS G.P.A.HOLDER,       

SRI.SRINIVAS SHUKLA, SON OF GAJENDRA SHUKLA, O/O. 1-11-222/2, BEGUMPET, HYDERABAD AND ANOTHER.  

respondent

Counsel for the Petitioners :Mr.D.HANUMANTH RAO.   

Counsel for the Respondents:MR.MILIND G.GOKHALE.     

ORDER 

This petition under Section 482 of the Code of Criminal Procedure seeks to quash crime No. 12/2001 of Begumpet Police Station, Secunderabad, which was referred to it by the learned XI Metropolitan Magistrate, Secunderabad.

The brief averments in the complaint which are necessary for the disposal of the petition are that the petitioners are doing business of selling all kinds of electronic items, that the petitioners are dealers of the 1st respondent- company, that the petitioners used to purchase various electronic items from the1st respondent-company on credit facility, that the petitioners, in discharge of certain dues to the 1st respondent-company, issued a cheque bearing No.571379, dated 15.5.1998, for a sum of Rs.50,000/- drawn on United Bank of India, Secunderabad Branch, Secunderabad, signed by the 2nd petitioner in the capacity of the proprietor of the 1st petitioner, that on the confirmation given by the petitioners that the cheque would be honoured on its presentation, the 1st respondent-company presented the cheque with its bankers, but the cheque was  returned unpaid with the endorsement, 'account closed', that the petitioners by making a false promise cheated the 1st respondent by not making payment, and  that therefore the petitioners are liable for an offence under Section 420

I.P.C.The complaint was referred to the police by the learned Magistrate under Section 156(3) Cr.P.C. on the basis of which the offence in question came to beregistered under Section 420 I.P.C.

Learned counsel for the petitioners contended that no specific overt acts are attributed to the petitioners which constitute any offence, much less an offence under Section 420 I.P.C., and that the petitioners requested the 1st respondent to return all the cheques which were issued by them to the complainant in

pursuance of a settlement between the parties on 2.1.1998.  Learned counsel for the 1st respondent contended that the notice issued by the petitioners to the 1st respondent does not relate to the presentation of the cheque in question and the legal notice, dated 8.6.1998, got issued by the petitioners to the 1st respondent through their Advocate does not say anything about the cheque in question, and that the allegation of the 1st respondent is that by making false promise, the petitioners made the 1st respondent part with the goods manufactured by it, which allegations squarely fall under Section 420 I.P.C., and that therefore, there are no grounds to quash the proceedings.  He relied upon OPTS Marketing (P) Ltd. V. State of A.P.1,

In order to constitute an offence of cheating under Section 420 I.P.C., the intention to deceive should be in existence at the time when the inducement was made.  It is necessary to show that a person had fraudulent intention at the time of making the promise to say that he committed an act of cheating.  A mere failure to keep up promise cannot be presumed as an act leading to cheating.

In OPTS Marketing (P) Ltd. (1 supra) a Full Bench of this Court held in para 29

(ii) as follows:

"Even after introduction of Section 138 of the Negotiable Instruments Act, prosecution under Section 420 IPC is maintainable in case of dishonour of cheques or postdated cheques issued towards payment of price of the goods purchased or hand loan taken, or in discharge of an antecedent debt or towards payment of goods supplied earlier, if the charge sheet contains an allegation that the accused had dishonest intention not to pay even at the time of issuance of the cheque, and the act of issuing the cheque, which was dishonoured, caused damage to his mind, body or reputation.  Private complaint or FIR alleging offence under Section 420 IPC for dishonour of cheques or postdated cheques cannot be quashed under Section 482 Cr.P.C. if the averments in the complaint show that the accused had, with a dishonest intention and to cause damage to his mind, body or reputation, issued the cheque which was not honoured."

It is specifically averred in the complaint that the petitioners made the 1st respondent part with the goods manufactured by it, that the intention of the petitioners was purely to cheat the 1st respondent right from the beginning by not making payments, that by making false promises petitioners made the 1st respondent roam around them for collecting the outstanding dues, that knowing fully well that the account on which the cheque was issued had been closed, the petitioners purposely issued the cheque only to cheat the 1st respondent, that by making false promise, the petitioners dragged the matter to deprive the complainant of its remedy provided under Section 138 of the Negotiable Instruments Act, that in spite of promises, the petitioners failed to make payment of the amount covered by the bounced cheque till date, and that, therefore, the petition is liable to be dismissed.

As seen from the letter addressed by the United Bank of India, dated 3.6.1998 to the 1st petitioner, the petitioners closed the account on 23.3.1998, and, therefore, the Bank requested the petitioners to return all the unused cheques immediately to avoid any complications in future.  Thus, it is clear that only on the request of the petitioners, their account with United Bank of India was closed on 23.3.1998.  The cheque in question was dated 15.5.1998 for Rs.50,000/-

.Though, in pursuance of the meeting held between the parties on 2.1.1998 the petitioners handed over 21 cheques to the 1st respondent, by letter dated 30.5.1998 petitioners issued three fresh cheques drawn on Central Bank of India in lieu of three old cheques drawn on United Bank of India, in view of the change of their bankers from United Bank to Central Bank. Through the said letter, petitioners specifically requested the 1st respondent to return three old cheques bearing Nos. 571376 to 571378 drawn on United Bank of India as they changed their bankers and issued three cheques bearing No. 078955, 47401 and  47480 drawn on Central Bank of India.  This letter was received by the 1st respondent on 30.5.1998 as evidenced by its acknowledgement thereon. The learned counsel for the 1st respondent has not denied receipt of the said letter.So, by 30.5.1998, the 1st respondent was aware of the fact that the petitioners changed their Bankers from United Bank of India to Central Bank of India.

It is not mentioned in the complaint as to when the cheque in question, dated 15.5.1998, for a sum of Rs.50,000/- was given to the 1st respondent, as to when it was presented to its banker, and as to when it was returned by the banker of the petitioners with the endorsement that the account was closed. As seen from the minutes of the meeting held on 2.1.1998, the accused handed over 21 cheques to be deposited every month from February 1998.

By 30.5.1998 petitioners informed the 1st respondent that three cheques drawn on Central Bank of India bearing Nos. 078955, dated 24.2.98 for Rs.50,000/-, 47401,dated 26.3.1998 for Rs.50,000/- and 47480, dated 28.4.1998 for Rs.50,000/- were issued in lieu of cheques bearing No.571376 to 571378 drawn on United Bank of India for Rs.50,000/- each.  The cheque in question bearing No. 571379 must bepresumed to have been presented after the above three new cheques were presented.  The complaint is silent about the receipt of the aforesaid three new cheques and whether they were returned for want of funds or they were encashed.

By the notice, dated 8.6.1998, got issued by the petitioners through their Advocate to the 1st respondent, petitioners specifically requested the 1st respondent to return the cheques bearing No. 571378 to 571396 drawn on United Bank of India, which include the cheque in question, in view of the change of their banker. As seen from the letter of the United Bank of India, the cheque bearing No. 571378, dated 15.4.1998, was presented on 3.6.1998. Therefore, it can be said that the cheque in question No. 571379, dated 15.5.1998, must have been presented on or after 3.6.1998.  So, by then the petitioners specifically informed the 1st respondent through their letter, dated 30.5.1998, and received by the 1st respondent on the same day, about the change of their banker.  The present complaint appears to have been filed as a counter blast to the report lodged by the 2nd petitioner with the Ramgopalpet police station, Secunderabad, against the 1st respondent.  That report was received by the said Police Station on 19.12.2000.  The 1st respondent filed the present complaint on 29.12.2000.

The contention of the petitioners that the present cheque is one of the post-dated cheques that were given to the 1st respondent in the month of January 1998 appears to be correct. The date of presentation of the cheque in question by the 1st respondent to its banker is crucial, and it is silent in the complaint.  The reason is that, if it is assumed that the petitioners issued the cheque in the month of January 98 to the 1st respondent, then it cannot be said that the petitioners had intention to cheat the 1st respondent, as alleged by the 1st respondent, because, as already stated supra, the petitioners issued three new cheques drawn on Central Bank of India in lieu of three cheques drawn on United Bank of India in view of the change of their bankers, and if it is assumed that the petitioners issued the cheque in question on 15.5.1998, still it cannot be said that they had intention to deceive the 1st respondent by that date, because, as already stated above, the 1st respondent did not state the date on which it presented the cheque in question to its bankers.Had the 1st respondent mentioned that date in the complaint, it would have certainly known as to whether by the date of presentation of the cheque in question, it had already had the knowledge about the change of bankers by the petitioners, and whether the 1st respondent presented the cheque in question despite the communication made to it by the petitioners through their letter, dated 30.5.1998, and the legal notice dated 8.6.1998.

If the petitioners had intention to deceive the 1st respondent right from the beginning, they would not have issued the aforesaid three cheques drawn on Central Bank of India, in lieu of the three cheques drawn on United Bank of India.  Viewed from any angle, it does not appear that the petitioners had intention to deceive the 1st respondent by the date of issuance of the cheque in question.

There is no specific allegation in the complaint that by 2.1.1998 the petitioners had dishonest intention to cheat the 1st respondent, except the bald and omnibus and general allegation that the accused had intention to cheat fromthe beginning.  The complaint is silent as to the existence of the minutes of the meeting between the parties.  The complaint also does not state that the 1st respondent received the letter of the petitioners dated 30.5.1998.  Similarly, the complaint does not speak of the 1st respondent receiving post-dated cheques in the month of January 1998.  The details as to when the 1st respondent presented the cheque in question to its banker, as to when it was dishonoured by the banker of the petitioners, and as to when the 1st respondent came to know about the dishonour of the cheque from its bankers, are conspicuous by their absence in the complaint.  In the column 'the date of offence' it is mentioned '15.5.1998 and 7.6.1998 and continuing'.  Therefore, even if the allegations in the complaint are prima facie accepted as true, the offence under Section 420 I.P.C. is not made out.Because in order to constitute the offence of cheating, the intention to deceive must be in existence at the time when the inducement was made. It appears that the 1st respondent did not deliberately mention the above details in the complaint.  The complaint does not also reveal that the 1st respondent filed all the aforesaid important material before the trial Court, crucial to arrive at a just decision in the case.

In view of the above discussion, it is clear that the 1st respondent has not approached the lower court with clean hands. There is no dispute about the proposition of the law laid down by the Full Bench in the case cited by the learned counsel for the 1st respondent.  Even according to that decision, there must be an allegation in the complaint or charge sheet that the accused had dishonest intention not to pay even at the time of issuance of the cheque.  The complaint does not show when the cheque was issued.

Therefore, the omnibus allegation that the accused had dishonest intention 'from the beginning' cannot be taken to fasten criminal liability on the petitioners.In the light of the above discussion at length, keeping in view the fact that the 1st respondent has not filed the complaint with clean hands, and on thorough appreciation of the facts available on record, I am of the considered view that the 1st respondent failed to establish prima facie case under Section 420 I.P.C. against the petitioners.  Hence, it is a fit case to quash the proceedings.

In the result, the petition is allowed, and the proceedings in crime No. 12/2001 of Begumpet P.S. (C.C. SR No. 1655 of 2000 on the file of the learned XI Metropolitan Magistrate, Secunderabad) are hereby quashed.

01 2001(1) ALD (Crl.) 312 (AP) (FB)