Calcutta High Court (Appellete Side)
Ajit Kumar Sinha vs The State Of West Bengal & Another on 29 January, 2025
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
Appellate Side
Present:
The Hon'ble Justice Ajay Kumar Gupta
C.R.R. 636 of 2017
Ajit Kumar Sinha
Versus
The State of West Bengal & Another
For the Petitioner : Mr. Mayukh Mukherjee, Adv.
Mr. Abhijit Singh, Adv.
Ms. Sarmistha Basak, Adv.
Ms. Aishwarya Bazaz, Adv.
For the Opposite Party No. 2 : Mr. Satadru Lahiri, Adv.
Mr. Krishna Chandra Das, Adv.
Mr. Safdar Azam, Adv.
Mr. Jyotirmoy Talukder, Adv.
Heard on : 14.11.2024
Judgment on : 29.01.2025
2
Ajay Kumar Gupta, J:
1. This instant Criminal Revisional application under Section
482 of the Code of Criminal Procedure, 1973 has been filed by the
petitioner/accused seeking for quashing of the proceedings being
Complaint Case No. 122006 of 2016 under Sections 406/420 of the
Indian Penal Code, 1860 pending before the Court of the Learned
Metropolitan Magistrate, 3rd Court at Calcutta including Impugned
Order dated 25.11.2016 passed in connection with the proceedings
therewith.
2. The background facts, which led to filing of this Criminal
Revisional application, may be adumbrated as under:
3. The Opposite Party No. 2 herein has filed and moved a
petition of complaint before the Learned Metropolitan Magistrate
being Complaint Case No. 122006 of 2016 alleging, inter alia, that in
the month of September, 2015, the accused no. 1, Odyssey Infomedia
Pvt. Ltd. approached the complainant through its Director, Mr. Ajit
Kumar Sinha through an E-Mail as they were in need of banquet
halls to hold an exhibition-cum-conference summit in the month of
November, 2015. In reply to their e-mail, the complainant has
arranged three banquet halls, namely, Rosewood, Banyan and Ebony
3
for exhibition-cum-conference summit and necessary rental charges
for hall, lunch and dinner were fixed.
4. As per the agreement, the aforementioned three banquet
halls were rented out to the accused no. 1 for holding their
exhibition-cum-conference summit from 9 am to 11 pm on
27.11.2015. After the completion of aforesaid event, a bill for the food
and rental charges of Rs. 2,18,425/- was raised but the same was
not paid by the accused person.
5. On requesting for payment of the said amount, Mr. Ajit
Kumar Sinha assured them that the bill amount would be paid.
Subsequently, based on the assurance given by Mr. Ajit Kumar
Sinha, the accused no. 2 issued cheque being no. 012823 amounting
to Rs. 2,18,425/- in favour of the complainant to discharge their
liability. However, the said cheque was returned by the bank on
02.12.2015 with remarks "dishonoured for insufficient funds".
6. After the said cheque was returned, the matter of its
dishonour was reported to the accused nos. 2 and 3. In response,
they stated that they were facing a financial crisis but assured that
they would arrange the money and make the payment as soon as
possible.
4
7. After a considerable period of time, the accused nos. 2 and 3
issued two fresh cheques drawn on the Central Bank of India, Sehani
Branch, Meerut Road, Ghaziabad, U.P., 201003 amounting to Rs.
1,00,000/- dated 15.04.2016 and Rs. 1,18,425/- dated 20.04.2016
in favour of the complainant. Both the cheques were presented to the
bank for encashment, but, were dishonoured due to "insufficient
funds".
8. The matter was once again reported to the accused nos. 2
and 3. They requested some time to arrange the payment of the Bill
amount. However, the accused person did not make any effort to pay
the money.
9. After a long period of time, the accused persons transferred a
sum of Rs. 1 Lakh in favour of the complainant. However, the
remaining outstanding balance of Rs. 1,18,425/- has not yet been
paid. The accused persons continued to avoid payment and
eventually denied making the payment. Therefore, they intentionally
cheated the complainant in furtherance of their common criminal
conspiracy.
10. On the other hand, Petitioner herein claims that he is the
Director of the Odyssey Infomedia Pvt. Ltd. located at 3BA-713, Tower
No. 4, 7th Floor, River Height, Hindon River, Raj Nagar Extension,
5
Ghaziabad, Uttar Pradesh, 20100. He further asserts that he is
completely innocent and in no way connected with the commission of
the alleged offence.
11. It is further the contention of the Petitioner that the Learned
Magistrate issued process in the nature of summons against the
petitioner and others and fixed the matter on 30.01.2017 for Service
Return and appearance of the accused persons. Accordingly, the
petitioner voluntarily surrendered before the Learned Magistrate and
vide order dated 30.01.2017, the petitioner was granted bail by the
Learned Magistrate.
12. The Learned Magistrate has overlooked the fact that while
taking cognizance under Sections 406/420/120B of the IPC against
the Petitioner, the petitioner's company was facing a financial crisis.
Moreover, the company has paid a sum of Rs. 1 Lakh out of total
outstanding dues. The transaction between the complainant and the
petitioner was related to the bill amount for services provided to the
Petitioner's company. The dispute regarding the non-payment of
outstanding dues would essentially be a civil liability and a criminal
prosecution does not lie in such a case. When a criminal prosecution
is initiated on the basis of a purely civil dispute, it would amount to a
clear abuse of process of law. The attempt by the Opposite Party No.
6
2 to convert a civil dispute into a criminal prosecution should have
not been allowed by the Learned Court. Hence, this Criminal
Revisional application.
SUBMISSION ON BEHALF OF THE PETITIONER:
13. Mr. Mukherjee, learned counsel appearing on behalf of the
petitioner along with others submitted that the petitioner is innocent
and the allegations made against him are entirely false. It is true that
there are some outstanding dues, but this dues fall within the
purview of civil liability. The banquet halls were rented to the
petitioner's company to hold exhibition-cum-conference summit on
27.11.2015 from 9 am to 11 pm and a sum of Rs. 2,18,425/- was
charged for halls and food. Out of this bill, Rs. 1 Lakh has already
been paid by the petitioner's company.
14. It was further submitted that, due to financial crisis, the
accused/petitioner's company was unable to pay the remaining
outstanding balance. As such, it could never be a Criminal Act in any
manner.
15. The petitioner herein is actually a resident of Uttar Pradesh
i.e. outside the territorial jurisdiction of the Learned Trial Court,
where the proceedings are pending against the present petitioner and
7
others. However, without following the mandatory provision of
Section 202 of the CrPC, the Learned Court issued summons against
the petitioner which is illegal. The Learned Magistrate issued
summons mechanically without applying judicious mind despite the
fact that none ingredients of Sections 406/420/120B of the Indian
Penal Code, 1860 are fulfilled.
16. It was further relied the following judgments to bolster his
contention that the outstanding dues amount, not paid by the
accused for services as provided by the opposite party no. 2, is come
within the purview of civil disputes and, in such a case, criminal
proceedings under Sections 420/406 of IPC cannot be continued and
the same may be quashed under Section 482 of CrPC for securing
ends of justice: -
i. Medmeme, LLC and Others Vs. Ihorse BPO
Solutions Private Limited1;
ii. Lalit Chaturvedi and Others Vs. State of Uttar
Pradesh and Another2;
iii. Birla Corporation Limited Vs. Adventz Investments
and Holdings Limited and Others WITH Birla
1
(2018) 13 SCC 374;
2
2024 SCC OnLine SC 171;
8
Buildings Limited Vs. Birla Corporation Limited WITH
Govind Promoters Private Limited Vs. Birla
Corporation Limited3;
iv. A.M. Mohan Vs. State Represented by SHO and
Another4.
SUBMISSION ON BEHALF OF THE OPPOSITE PARTY NO. 2:
17. Per contra, Mr. Lahiri, learned counsel along with others
appearing on behalf of the opposite party no. 2 submitted that the
Learned Court below rightly issued summons upon the accused
persons including the present petitioner as they all are liable for such
alleged offences. The accused persons have, despite knowing the fact
that they do not have any amount in the bank, issued cheques on
twice occasions for payment of bill amount and those cheques were,
one after another, bounced due to insufficient funds. The said
cheques were intentionally issued by the accused persons only to
cheat the opposite party no. 2.
18. Learned counsel placed reliance of judgments passed in the
cases of Medchl Chemicals & Pharma (P) Ltd. Vs. Biological E.
3
(2019) 16 SCC 610 : (2020) 2 SCC (Civ) 713 : 2019 SCC OnLine SC 682;
4
2024 SCC OnLine SC 339.
9
Ltd. and Others5 and Nagpur Steel & Alloys Pvt. Ltd. vs. P.
Radhakrishna Alias Ranjan and Ors.6 to support of his contention
that conduct of the accused is relevant for appreciating
maintainability of prosecution under Section 415 of Indian Penal
Code, 1860.
Learned counsel has further placed reliance of judgments
passed in the cases of Vijayander Kumar & Ors. Vs. State of
Rajasthan & Anr.7 and Mahesh Chaudhary vs. State of
Rajasthan and Anr.8 to support of his contention that mere part
payment of a paltry sum does not dilute the offence especially when
preceding conduct demonstrates culpability.
19. It was further submitted that there is no
objection/dispute/demur regarding service provided by the opposite
party no. 2 and even there is no dispute with regard to the bill
amount raised by the opposite party no. 2. But, they did not heed to
pay the same. The accused persons had not paid any advance at the
time of booking of the said banquet halls due to their culpable
intention to cheat from the very beginning. The opposite party no. 2
has able to satisfied the Learned Court below by filing a petition of
5
(2000) 3 SCC 269;
6
1997 SCC (Cri) 1073
7
(2014) 3 SCC 389;
8
(2009) 4 SCC 439.
10
complaint supported by an affidavit as well as examination of
witnesses under Section 200 of the CrPC and, thereafter, it was found
prima facie case by the Learned Magistrate against the accused
persons under Sections 406/420/120B of the IPC and, therefore,
issued the summons against the accused persons. The complainant
has disclosed all the ingredients of sections punishable under
Sections 406/420/120B of the IPC since they have induced with
mala fide intention to cheat the opposite party no. 2 from the very
beginning.
20. Learned counsel also drew attention of Section 415 of Indian
Penal Code, 1860 (Explanation D) indicating that sections are very
much attracted against the accused persons. Therefore, at the initial
stage of enquiry, the proceedings should not be quashed. Normally,
revisional jurisdiction should be exercised on a question of law. When
factual appreciation is involved, a full-fledged trial is required.
Learned counsel has cited judgments passed in the cases of Vijay
Dhanuka and Ors. Vs. Najima Mamtaj and Ors.9 and Bhushan
Kumar and Anr. Vs. State (NCT of Delhi) and Anr.10 to support of
his contention that there is sufficient compliance of Section 202 of
9
(2014) 14 SCC 638;
10
(2012) 5 SCC 424;
11
Code of Criminal Procedure, 1973 and no illegality is attached with
summoning order.
21. It was further submitted that the Learned Court below
examined two witnesses and considered documents supplied by the
complainant as such, Section 202 of CrPC is duly complied with.
22. Learned counsel further placed reliance of a judgment
passed in the case of S.P. Gupta Vs. Ashutosh Gupta11 to support
of his contention that intention to cheat is a mental state which being
a question of fact can only be decided during trial. He further places
reliance of the judgments passed in the cases of Lalmuni Devi (Smt.)
Vs. State of Bihar & Ors.12 and Kamal Shivaji Pokarnekar Vs.
State of Maharashtra & Ors.13 to support of his contention that
merely a fact, has civil profile, does not outweigh the criminality
attached to the same.
23. Learned counsel further placed reliance of judgments passed
in the cases of Pradeep S. Wodeyar Vs. State of Karnataka14 and
Kamal Ghosh and Anr. Vs. State of West Bengal and Anr.15 to
11
(2010) 6 SCC 562;
12
(2001) 2 SCC 17;
13
(2019) 14 SCC 350;
14
(2021) 19 SCC 62;
15
2023 SCC OnLine Cal 699 : (2023) 3 AICLR 744;
12
support of his contention that cognizance is not bad in law in view of
prima facie material produced by the Opposite Party No. 2.
24. Learned counsel further placed reliance of judgments passed
in the cases of Ghanshyam Sharma Vs. Surendra Kumar Sharma
& Ors.16 and Skoda Auto Volkswagen (India) Private Limited Vs.
State of Uttar Pradesh and Ors.17 to support of his contention that
quashing is impossible if any offence is made out irrespective of the
offence for which summons has been issued and finally prayed for
dismissal of the instant Criminal Revisional application.
DISCUSSION AND FINDINGS BY THIS COURT:
25. Heard the arguments and submissions made on behalf of the
rival parties and upon perusal of the record as well as judgments
referred to by the learned counsels appearing on behalf of the parties,
this Court finds the opposite party no. 2 had filed a petition of
complaint alleging, inter alia, that criminal breach of trust and
cheating were committed by the Petitioner and other accused from
the very inception. The fact that they did not pay any advance
amount indicates their culpable intention from the outset. They
issued cheques for payment of their liabilities on two occasions
16
(2014) 13 SCC 401;
17
(2021) 5 SCC 795.
13
despite being fully aware that there were insufficient funds in their
bank account. Three cheques were dishonoured due to insufficient
funds in that bank account. However, it is an admitted fact of the
Opposite Party No. 2 that the accused persons have paid a sum of Rs.
1,00,000/= out of total amount of bill of service provided by the
Opposite Party No. 2 for holding their exhibition-cum-conference
summit from 9 am to 11 pm on 27.11.2015.
26. In the present case, it has not been stated anywhere in the
petition of complaint that the petitioner had any dishonest or
fraudulent intention at the time of booking the banquet halls. The
opposite party no. 2 provided service to the accused persons without
receiving advance payment. This indicates that the accused had a
good relationship with the complainant even though, at the time of
booking of any banquet hall or for food, the provider charges usually
advance amount. It is further an admitted fact that the company had
paid Rs. 1 Lakh out of the total outstanding dues amount to the
complainant. Dispute arises between the parties when the said
company allegedly failed to pay the outstanding amount of Rs.
1,18,425/- (Rupees One Lakh Eighteen Thousand Four Hundred
Twenty-Five) only. This dispute is clearly civil in nature and that
should be resolved before the Civil Court rather than through the
14
initiation of criminal proceedings. No other prima facie ingredients
were made out by the opposite party no. 2 in the petition of complaint
regarding offence punishable under Section 406 or 420 of the IPC as
alleged.
27. The differences in the ingredients required for an offence of
Criminal Breach of Trust and Cheating have been highlighted by the
Hon'ble Supreme Court in the case of Delhi Race Club (1940) Ltd.
& Ors vs. State of Uttar Pradesh & Anr.18 in paragraph nos. 24 to
30 as under: -
"24. This Court in its decision in S.W. Palanitkar &
Ors. v. State of Bihar & Anr. reported in (2002) 1
SCC 241 : AIR 2001 SC 2960) expounded the
difference in the ingredients required for constituting
an of offence of criminal breach of trust (Section
406 IPC) viz-a-viz the offence of cheating (Section
420). The relevant observations read as under: -
"9. The ingredients in order to constitute a
criminal breach of trust are: (i) entrusting a
person with property or with any dominion
over property, (ii) that person entrusted (a)
dishonestly misappropriating or converting
that property to his own use; or (b)
dishonestly using or disposing of that
property or wilfully suffering any other
person so to do in violation (i) of any
18
AIR 2024 SC 4531 : AIR Online 2024 SC 612.
15
direction of law prescribing the mode in
which such trust is to be discharged, (ii) of
any legal contract made, touching the
discharge of such trust.
10. The ingredients of an offence of cheating
are: (i) there should be fraudulent or
dishonest inducement of a person by
deceiving him, (ii)(a) the person so deceived
should be induced to deliver any property to
any person, or to consent that any person
shall retain any property; or (b) the person
so deceived should be intentionally induced
to do or omit to do anything which he would
not do or omit if he were not so deceived;
and (iii) in cases covered by (ii)(b), the act of
omission should be one which causes or is
likely to cause damage or harm to the
person induced in body, mind, reputation or
property."
25. What can be discerned from the above is that the
offences of criminal breach of trust (Section 406 IPC)
and cheating (Section 420 IPC) have specific
ingredients.
In order to constitute a criminal breach of trust
(Section 406 IPC): -
1) There must be entrustment with person for property
or dominion over the property, and
2) The person entrusted: -
a) dishonestly misappropriated or converted property
to his own use, or
16
b) dishonestly used or disposed of the property or
willfully suffers any other person so to do in violation
of:
i. any direction of law prescribing the method in
which the trust is discharged; or
ii. legal contract touching the discharge of trust
(see: S.W.P. Palanitkar (supra).
Similarly, in respect of an offence under Section
420 IPC, the essential ingredients are: -
1) deception of any person, either by making a false
or misleading representation or by other action or by
omission;
2) fraudulently or dishonestly inducing any person to
deliver any property, or
3) the consent that any persons shall retain any
property and finally intentionally inducing that person
to do or omit to do anything which he would not do or
omit (see: Harmanpreet Singh Ahluwalia v. State of
Punjab, (2009) 7 SCC 712 : (2009) Cri.L.J. 3462 (SC))
26. Further, in both the aforesaid sections, mens rea
i.e. intention to defraud or the dishonest intention
must be present, and in the case of cheating it must
be there from the very beginning or inception.
27. In our view, the plain reading of the complaint
fails to spell out any of the aforesaid ingredients
17
noted above. We may only say, with a view to clear a
serious misconception of law in the mind of the police
as well as the courts below, that if it is a case of the
complainant that offence of criminal breach of trust as
defined under Section 405 of IPC, punishable
under Section 406 of IPC, is committed by the
accused, then in the same breath it cannot be said
that the accused has also committed the offence of
cheating as defined and explained in Section 415 of
the IPC, punishable under Section 420 of the IPC.
28. Every act of breach of trust may not result in a
penal offence of criminal breach of trust unless there
is evidence of manipulating act of fraudulent
misappropriation. An act of breach of trust involves a
civil wrong in respect of which the person may seek
his remedy for damages in civil courts but, any
breach of trust with a mens rea, gives rise to a
criminal prosecution as well. It has been held in Hari
Prasad Chamaria v. Bishun Kumar Surekha & Ors.,
reported in (1973) 2 SCC 823 : (AIR 1974 SC 301) as
under:
"4. We have heard Mr. Maheshwari on
behalf of the appellant and are of the
opinion that no case has been made out
against the respondents under Section
420 Penal Code, 1860. For the purpose of
the present appeal, we would assume that
the various allegations of fact which have
been made in the complaint by the
18
appellant are correct. Even after making
that allowance, we find that the complaint
does not disclose the commission of any
offence on the part of the respondents
under Section 420 Penal Code, 1860. There
is nothing in the complaint to show that the
respondents had dishonest or fraudulent
intention at the time the appellant parted
with Rs. 35.000/- There is also nothing to
indicate that the respondents induced the
appellant to pay them Rs. 35,000/- by
deceiving him. It is further not the case of
the appellant that a representation was
made, the respondents knew the same to be
false. The fact that the respondents
subsequently did not abide by their
commitment that they would show the
appellant to be the proprietor of Drang
Transport Corporation and would also
render accounts to him in the month of
December might create civil liability on the
respondents for the offence of cheating.”
29. To put it in other words, the case of cheating and
dishonest intention starts with the very inception of
the transaction. But in the case of criminal breach of
trust, a person who comes into possession of the
movable property and receives it legally, but illegally
retains it or converts it to his own use against the
terms of the contract, then the question is, in a case
like this, whether the retention is with dishonest
intention or not, whether the retention involves
criminal breach of trust or only a civil liability would
depend upon the facts of each case.
19
30. The distinction between mere breach of contract
and the offence of criminal breach of trust and
cheating is a fine one. In case of cheating, the
intention of the accused at the time of inducement
should be looked into which may be judged by a
subsequent conduct, but for this, the subsequent
conduct is not the sole test. Mere breach of contract
cannot give rise to a criminal prosecution for cheating
unless fraudulent or dishonest intention is shown
right from the beginning of the transaction i.e. the time
when the offence is said to have been committed.
Therefore, it is this intention, which is the gist of the
offence. Whereas, for the criminal breach of trust, the
property must have been entrusted to the accused or
he must have dominion over it. The property in
respect of which the offence of breach of trust has
been committed must be either the property of some
person other than the accused or the beneficial
interest in or ownership’ of it must be of some other
person. The accused must hold that property on trust
of such other person. Although the offence, i.e. the
offence of breach of trust and cheating involve
dishonest intention, yet they are mutually exclusive
and different in basic concept. There is a distinction
between criminal breach of trust and cheating. For
cheating, criminal intention is necessary at the time of
making a false or misleading representation i.e., since
inception. In criminal breach of trust, mere proof of
entrustment is sufficient. Thus, in case of criminal
20
breach of trust, the offender is lawfully entrusted with
the property, and he dishonestly misappropriated the
same. Whereas, in case of cheating, the offender
fraudulently or dishonestly induces a person by
deceiving him to deliver any property. In such a
situation, both the offences cannot co-exist
simultaneously.”
28. The Hon’ble Supreme Court further laid down legal
propositions of law with regard to applying of Sections 406 and 420 of
the Indian Penal Code in the said particular judgment as follows:
“42. When dealing with a private complaint, the law
enjoins upon the magistrate a duty to meticulously
examine the contents of the complaint so as to
determine whether the offence of cheating or criminal
breach of trust as the case may be is made out from
the averments made in the complaint. The magistrate
must carefully apply its mind to ascertain whether the
allegations, as stated, genuinely constitute these
specific offences. In contrast, when a case arises from
a FIR, this responsibility is of the police – to
thoroughly ascertain whether the allegations levelled
by the informant indeed falls under the category of
cheating or criminal breach of trust. Unfortunately, it
has become a common practice for the police officers
to routinely and mechanically proceed to register an
21FIR for both the offences i.e. criminal breach of trust
and cheating on a mere allegation of some dishonesty
or fraud, without any proper application of mind.
43. It is high time that the police officers across the
country are imparted proper training in law so as to
understand the fine distinction between the offence of
cheating viz-a-viz criminal breach of trust. Both
offences are independent and distinct. The two
offences cannot coexist simultaneously in the same
set of facts. They are antithetical to each other. The
two provisions of the IPC (now BNS, 2023) are not
twins that they cannot survive without each other.”
29. This Court also relied a judgment of the Hon’ble Supreme
Court passed in the case of The State of Kerala v. A. Pareed Pillai
and Anr.19, where it was held as follows: –
“To hold a person guilty of the offence of cheating, it has
to be shown that his intention was dishonest at the time
of making the promise. Such a dishonest intention
cannot be inferred from the mere fact that he could not
subsequently fulfill the promise.”
19
1972 Cri.L.J.1243
22
30. Similarly, in the case in hand, there is nothing to show that
the petitioner had dishonest or fraudulent intention at the time of
booking banquet halls from the Opposite Party No. 2. It is not
disputed by the complainant that he had not paid any amount.
However, complainant raised question about the outstanding dues
amount. Non-payment of outstanding dues amount, by no stretch of
imagination, can be called dishonest inducements. Moreover,
complainant by itself admitted in the petition of complaint that the
company had stated about financial crisis. It was/is purely a non-
fulfilment of contract, which definitely comes under civil dispute.
Simply because of the amounts have not been paid or there are
outstanding will not make it a case of wilful or dishonest inducement
or deception or criminal breach of trust.
31. In the case of Haridaya Ranjan Prasad Verma and Ors. v.
State of Bihar and Anr.20, the Hon’ble Apex Court also held that: –
“There was no allegation in the complaint indicating,
expressly or impliedly, any intentional deception on
the part of the appellants right from the beginning of
the transaction. The Hon’ble Apex Court drew
distinction between cheating from mere breach of
contract. According to the Hon’ble Apex Court,20
(2000) 4 Supreme Court Cases 168
23definition of cheating contemplates two separate
classes of acts namely deception by fraudulent or
dishonest inducement and deception by intention.
Deception by fraudulent or dishonest inducement
must be shown to exist right from the beginning of the
transaction”.
32. It is not the case of the opposite party no. 2, in the present
case, that the company was deceived by fraudulent or dishonest
inducement from the beginning at the time of booking the banquet
halls for the purpose of holding their exhibition-cum-conference
summit from 9 am to 11 pm on 27.11.2015. Rather it is admitted
that the accused persons booked the Banquet Halls through e-mail.
Culpable intention, right from the beginning when the promise was
made, cannot be presumed merely from a subsequent failure to keep
up the promise. It depends on the intention of the accused at the
time of inducement and the subsequent conduct is not the sole test.
The Court must decide on the basis of the substance of the complaint
and not on the basis of mere use of the word “cheating” in the
complaint. This Court finds that in the instant case, the petitioner
admittedly made payment of Rs. 1 Lakh out of total dues amount of
Rs. 2,18,425/- and Rs. 1,18,425/- is now outstanding as alleged by
24
the complainant. Therefore, the dishonest intention of the petitioner,
from the very inception of the transaction, cannot be presumed. In
my view, neither the offence of cheating punishable under Section
420 of the Indian Penal Code, 1860 is made out from the complaint
nor can I persuade myself to hold that an offence punishable under
Sections 406/120B of the Indian Penal Code, 1860 is made out from
the allegations made in the complaint.
33. Upon perusal of the copy of petition of complaint, it further
appears that there was no fraudulent or dishonest inducement or
deception by intentional practice by the petitioner right from the
inception of booking banquet halls. Even if subsequent payment has
not been made, it does not amount to deception, fraudulent or
dishonest inducement nor can it be considered to deception by
intentional means from the beginning. Therefore, in the fact of this
case, no case has been made out under Section 420 or 406 of the
IPC. Non-payment of the outstanding amount cannot be classified as
cheating in the facts of the case.
34. In the case of Paramjeet Batra v. State of Uttarakhand21,
the Hon’ble Court recognized that although the inherent powers of a
High Court under Section 482 of the Code of Criminal Procedure,
21
(2013) 11 SCC 673
25
1973 should be exercised sparingly, yet the High Court must not
hesitate in quashing such criminal proceedings which are essentially
of a civil nature. This is what was held:
“12. While exercising its jurisdiction under Section
482 of the Code the High Court has to be cautious.
This power is to be used sparingly and only for the
purpose of preventing abuse of the process of any
court or otherwise to secure ends of justice. Whether a
complaint discloses a criminal offence or not depends
upon the nature of facts alleged therein. Whether
essential ingredients of criminal offence are present or
not has to be judged by the High Court. A complaint
disclosing civil transactions may also have a criminal
texture. But the High Court must see whether a
dispute which is essentially of a civil nature is given a
cloak of criminal offence. In such a situation, if a civil
remedy is available and is, in fact, adopted as has
hesitate to quash the criminal proceedings to prevent
abuse of process of the court.”
(Emphasis supplied)
35. The accused person issued cheques on twice occasions to the
complainant for payment of the bill amount and those cheques were
returned with remarks “insufficient funds”. Despite the said facts, no
action was taken by the complainant to file proceedings under
Section 138 read with Section 141 of the Negotiable Instruments Act,
26
1881 though it was presumably a criminal act. The accused had
already informed the complainant that they were facing financial
crisis which was well within the complainant’s knowledge. The
opposite party no. 2 took no steps though proceedings under Section
138 read with Section 141 of the NI Act, 1881, could have been
initiated against the accused for commission of offence punishable
under N.I. Act, 1881.
36. So far as the compliance of Section 202 of the CrPC is
concerned, it is admitted fact that the petitioner resides beyond the
territorial jurisdiction of the Court concerned. There is no dispute
with regard to the address. Accordingly, it would be necessary to
assert whether the Learned Magistrate should follow the provisions of
sub-section (1) of Section 202 of the CrPC and, for that, this Court
relied a judgment passed in S.S. Binu Vs. State of West Bengal &
Anr.22 where the Division Bench observed in paragraph nos. 65 to 72
as under: –
“65. The term “inquiry” is defined under Sub-Section
(g) of Section 2 Cr.P.C which is quoted below: –
“2.(g) “inquiry” means every inquiry other than
trial, conducted under this court by a
Magistrate or court.”
22
2018 SCC OnLine Cal 16881: (2018) 3 RCR (Cri) 4: (2018) 5 CHN 562.
27
66. The above provision purports that every inquiry
other than a trial conducted by the Magistrate or court
is an inquiry under Section 200, Cr.P.C. Examination
of complaint only is necessary with the option of
examining the witness present, if any, under the
inquiry under Section 202, Cr.P.C., the witnesses are
examined for the purpose of deciding whether or not
there is sufficient ground for proceeding against the
accused.
67. In Chandra Deo Singh Vs. P. C. Bose a four
Judges Bench of the Hon’ble Supreme Court
considered Section 202 of the old Criminal Procedure
and held as under: –
8. . . . the object of the provisions of
Section 202 (corresponding to present Section 202 of
the Code), was to enable the Magistrate to form an
opinion as to whether process should be issued or not
and to remove from his mind any hesitation that he
may have felt upon the mere perusal of the complaint
and the consideration of the complainant’s evidence
on oath.
68. The Hon’ble Supreme Court while considering the
objects underlined the provisions of Section 202
Cr.P.C. in Manharibhai Muljibhai Kakadia & Anr.
(supra) made the following observations: –
“20. Section 202 of the Code has twin
objects; one, to enable the Magistrate to scrutinize
28carefully the allegations made in the complaint with a
view to prevent a person named therein as accused
from being called upon to face an unnecessary,
frivolous or meritless complaint and the other, to find
out whether there is some material to support the
allegations made in the complaint. The Magistrate has
a duty to elicit all facts having regard to the interest of
an absent accused person and also to bring to book a
person or persons against whom the allegations have
been made. To find out the above, the Magistrate
himself may hold an inquiry under Section 202 of the
Code or direct an investigation to be made by a police
officer. The dismissal of the complaint under Section
203 is without doubt a pre-issuance of process stage.
The Code does not permit an accused person to
intervene in the course of inquiry by the Magistrate
under Section 202. The legal position is no more res
integra in this regard. More than five decades back,
this Court in Vadilal Panchal v. Dattatraya Dulaji
Ghadigaonker with reference to Section 202 of the
Criminal Procedure Code, 1898 (corresponding to
Section 202 of the present Code) held that the inquiry
under Section 202 was for the purpose of ascertaining
the truth or falsehood of the complaint, i.e. for
ascertaining whether there was evidence in support
of the complaint so as to justify the issuance of
process and commencement of proceedings against
the person concerned.
29
69. The amended provision of sub-section (1) of
Section 202 CrPC came up for consideration of the
Hon’ble Supreme Court in the matter of National
Bank of Oman (supra) and the following observation
made in the above decision is hereunder: –
9. The duty of a Magistrate receiving a
complaint is set out in Section 202, Cr.PC and there is
an obligation on the Magistrate to find out if there is
any matter which calls for investigation by a criminal
court. The scope of enquiry under this section is
restricted only to find out the truth or otherwise of the
allegations made in the complaint in order to
determine whether process has to be issued or not.
Investigation under Section 202, CrPC is different
from the investigation contemplated in Section 156 as
it is only for holding the Magistrate to decide whether
or not there is sufficient ground for him to proceed
further. The scope of enquiry under Section 202, CrPC
is, therefore, limited to the ascertainment of truth or
falsehood of the allegations made in the complaint:
(i) on the materials placed by the complainant before
the court;
(ii) for the limited purpose of finding out whether a
prima facie case for issue of process has been made
out; and
(iii) for deciding the question purely from the point of
view of the complainant without at all adverting to
any defense that the accused may have.
30
70. In Vijay Dhanuka (supra), it has been held that
under Section 200, Cr. P.C, examination of
complainant only is necessary with the option of
examining the witnesses present, if any, whereas in
enquiry under Section 202 Cr. P.C., the witnesses are
examined for the purpose of deciding whether or not
there is sufficient ground for proceeding against the
accused. The relevant portion of the above decision is
set out below:
17. In view of our answer to the aforesaid
question, the next question which falls for
our determination is whether the learned
Magistrate before issuing summons has
held the inquiry as mandated under
Section 202 of the Code. The word
“inquiry” has been defined under Section 2
(g) of the Code, the same reads as follows:
“2. xxx xxx xxx (g) “inquiry” means every
inquiry, other than a trial, conducted under
this Code by a Magistrate or Court; xxx xxx
xxx”. It is evident from the aforesaid
provision, every inquiry other than a trial
conducted by the Magistrate or Court is an
inquiry. No specific mode or manner of
inquiry is provided under Section 202 of
the Code. In the inquiry envisaged under
Section 202 of the Code, the witnesses are
examined whereas under Section 200 of
the Code, examination of the complainant
31only is necessary with the option of
examining the witnesses present, if any.
18. This exercise by the Magistrate, for the
purpose of deciding whether or not there is
sufficient ground for proceeding against
the accused, is nothing but an inquiry
envisaged under Section 202 of the Code.
In the present case, as we have stated
earlier, the Magistrate has examined the
complainant on solemn affirmation and the
two witnesses and only thereafter he had
directed for issuance of process. In view of
what we have observed above, we do not
find any error in the order impugned. In
the result, we do not find any merit in the
appeals and the same are dismissed
accordingly.
71. In Vijay Dhanuka (supra) the aforesaid principle
has been repeated and reiterated in the observation
that under Section 200, Cr.P.C. the examining of
complainant only is necessary with the option of
examining the witnesses present, if any. Though no
specific mode or manner of enquiry is provided under
Section 202 Cr.P.C., in an enquiry under Section 202,
Cr. P.C., the witnesses are examined for the purpose
of deciding whether or not there is sufficient ground of
proceeding against the accused. The relevant portion
of the above decision is quoted below:
32
14. In view of our answer to the aforesaid question,
the next question which falls for our determination is
whether the learned Magistrate before issuing
summons has held the inquiry as mandated under
Section 202 of the Code. The word “inquiry” has been
defined under Section 2 (g) of the Code, the same
reads as follows:
2. (g) ‘inquiry’ means every inquiry, other
than a trial, conducted under this Code by a
Magistrate or court,
It is evident from the aforesaid provision,
every inquiry other than a trial conducted by the
Magistrate or the court is an inquiry. No specific mode
or manner of inquiry is provided under Section 202 of
the Code. In the inquiry envisaged under Section 202
of the Code, the witnesses are examined whereas
under Section 200 of the Code, examination of the
complainant only is necessary with the option of
examining the witnesses present, if any. This exercise
by the Magistrate, for the purpose of deciding whether
or not there is sufficient ground for proceeding against
the accused, is nothing but an inquiry envisaged
under Section 202 of the Code.
15. In the present case, as we have stated earlier, the
Magistrate has examined the complainant on solemn
affirmation and the two witnesses and only thereafter
he had directed for issuance of process.
33
72. Therefore, keeping in mind the object sought to be
achieved by way of amendment of sub-section (1) of
Section 202, Cr.P.C., the nature of enquiry as
indicated in Section 19 of the Criminal Procedure
(Amendment) Act, 2005, the Magistrate concerned is
to ward of false complaints against such persons who
reside at far of places with a view to save them for
unnecessary harassment and the Learned Magistrate
concerned is under obligation to find out if there is
any matter which calls for investigation by Criminal
Court in the light of the settled principles of law
holding an enquiry by way of examining the
witnesses produced by the complainant or direct an
investigation made by a police officer as discussed
hereinabove.”
37. The Learned Magistrate has directly issued summons after
examining the complainant and witness under Section 200 of the
CrPC but not postpone the proceedings, signalling that there is
enough prima facie evidence to proceed with the case without
further delay but this Court does not find such materials and
ingredients of the offence punishable under Sections 406/420/120B
of the Indian Penal Code, 1860.
34
38. In the light of above observations together with averments
contained in the petition of complaint, this Court finds ingredients of
the offences alleged by the opposite party no. 2 are not present.
Merely because, non-payment of outstanding amount does not
constitute offences punishable under Sections 406 and 420 of the
Indian Penal Code, 1860. The allegation in the complaint does not
spell out any essential ingredients for commission of offence under
Sections 406 and 420 of the Indian Penal Code, 1860.
39. Judgments referred by the leaned counsel appearing on behalf
of the Opposite Party No. 2 do not improve the case in favour of the
Opposite Party No. 2 in any manner.
40. From the perusal of the impugned order dated 25.11.2016
passed by the Learned Chief Metropolitan Magistrate at Calcutta by
which cognizance was taken mechanically without assigning a reason
thereof and transferred the case record to the file of Learned
Metropolitan Magistrate, 3rd Court at Calcutta for enquiry and
disposal in accordance with law though the Learned Chief
Metropolitan Magistrate must have recorded the reason for taking
cognizance even prima facie thereto. Order passed thereby lacks of
non-application of mind.
35
41. The disputes between the parties are purely civil in nature
and criminal proceeding, in such a civil nature case, should not be
allowed to be continued any further against the present petitioner
otherwise it would be an abuse of process of law. The Hon’ble
Supreme Court, time and again, deprecated the proceedings initiated
under Sections 406/420 of the Indian Penal Code on the allegation of
non-payment of outstanding dues. Attempt to convert a civil dispute
into a criminal matter, potentially aimed at pressurizing the
petitioner into settling the dispute with the complainant should not
be encouraged. Continuation of such criminal proceedings against
the petitioner will be an abuse of the process of the law. Accordingly,
this Court inclined to invoke its inherent power under Section 482 of
the Code of Criminal Procedure, 1973 for quashing of the said
criminal proceedings.
42. Accordingly, CRR No. 636 of 2017 is allowed. Connected
applications, if any, are also, thus, disposed of.
43. As a result, the criminal proceedings being Complaint Case
No. 122006 of 2016 under Sections 406/420 of the Indian Penal
Code, 1860 pending before the Court of the Learned Metropolitan
Magistrate, 3rd Court at Calcutta including Order dated 25.11.2016 is
hereby quashed insofar as the petitioner is concerned.
36
44. Let a copy of this Judgment be sent to the Learned Trial
Court for information.
45. Interim order, if any, stands vacated.
46. Urgent photostat certified copy of this Judgment, if applied
for, is to be given as expeditiously to the parties on compliance of all
legal formalities.
(Ajay Kumar Gupta, J)
P. Adak (P.A.)
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