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Friday, January 11, 2013

Quash - cognizance under Sections 406 and 420 of the Indian Penal Code (for short “the IPC”) against the respondent No. 2 in exercise of power under Section 190(1)(b) of the Code of Criminal Procedure (for short “the CrPC”) - High Court of Judicature at Allahabad has quashed the order dated 5.6.2010 passed by the learned Chief Judicial Magistrate, Gautam Budh Nagar, taking cognizance under Sections 406 and 420 of the Indian Penal Code (for short “the IPC”) against the respondent No. 2 in exercise of power under Section 190(1)(b) of the Code of Criminal Procedure (for short “the CrPC”) In the very nature of its constitution, it is the judicial obligation of the High Court to undo a wrong in course of administration of justice or to prevent continuation of unnecessary judicial process. This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest. The full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by necessary intendment. Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists. The power possessed by the High Court under Section 482 of the Code is of wide amplitude but requires exercise with great caution and circumspection.” 31. Applying the aforesaid parameters we have no hesitation in coming to hold that neither the FIR nor the protest petition was mala fide, frivolous or vexatious. It is also not a case where there is no substance in the complaint. the protest petition prima facie makes out a case against the husband and the wife regarding collusion and the intention to cheat from the very beginning, inducing him to hand over a huge sum of money to both of them. Their conduct of not stating so many aspects, namely, the Power of Attorney executed by the original owner, the will and also the sale effected by the wife in the name of Monika Singh on 28.7.2008 cannot be brushed aside at this stage. Therefore, we are disposed to think that the High Court, while exercising the extraordinary jurisdiction, had not proceeded on the sound principles of law for quashment of order taking cognizance. The High Court and has been guided by the non-existence of privity of contract and without appreciating the factual scenario has observed that the wife was merely present. Be it noted, if the wife had nothing to do with any of the transactions with the original owner and was not aware of the things, possibly the view of the High Court could have gained acceptation, but when the wife had the Power of Attorney in her favour and was aware of execution of the will, had accepted the money along with her husband from the complainant, it is extremely difficulty to say that an innocent person is dragged to face a vexatious litigation or humiliation. In view of our aforesaid analysis we allow the appeal, set aside the order passed by the High Court and direct the Magistrate to proceed in accordance with law.


                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO.  78  OF 2013
               (Arising out of S.L.P. (Crl.) No. 2089 of 2011)


Arun Bhandari                                      ... Appellant

                                   Versus

State of U.P. and others                                  ...Respondents








                               J U D G M E N T


Dipak Misra, J.



      Leave granted.

   2. Calling  in  question  the  legal  pregnability  of  the  order  dated
      29.1.2011 passed by the High  Court  of  Judicature  at  Allahabad  in
      Criminal Misc. Writ Petition No. 69 of 2011 whereby the learned single
      Judge in exercise of jurisdiction under Articles 226 and  227  of  the
      Constitution has quashed  the  order  dated  5.6.2010  passed  by  the
      learned  Chief  Judicial  Magistrate,  Gautam   Budh   Nagar,   taking
      cognizance under Sections 406 and 420 of the Indian  Penal  Code  (for
      short “the IPC”) against the respondent No. 2  in  exercise  of  power
      under Section 190(1)(b) of the Code of Criminal Procedure  (for  short
      “the CrPC”) and the  order  dated  4.12.2010  passed  by  the  learned
      Sessions Judge, Gautam Budh Nagar affirming the  said  order,  on  the
      foundation that the allegations made neither in the  FIR  nor  in  the
      protest petition constitute offences under the aforesaid sections, the
      present appeal by special leave has been preferred.

   3. The factual score as depicted are that
the appellant is a Non-Resident
      Indian (NRI) living in Germany and while looking  for  a  property  in
      Greater Noida, he came in  contact  with  respondent  No.  2  and  her
      husband, Raghuvinder Singh,  who  claimed  to  be  the  owner  of  the
      property in question and offered to sell the same.
On  24.3.2008,  as
      alleged, both the husband and wife agreed to sell the residential plot
      bearing No.  131,  Block  –  (Cassia-Fastula  Estate),  Sector  CHI-4,
      Greater Noida, U.P. for a consideration  of  Rs.2,43,97,880/-  and  an
      agreement to that effect was executed by the respondent  No.  3,  both
      the husband and wife jointly received a sum of  Rs.1,05,00,000/-  from
      the appellant towards part payment of the sale consideration.  
It  was
      further  agreed  that  the  respondent  Nos.  2  and  3  would  obtain
      permission from Greater Noida Authority to transfer  the  property  in
      his favour and execute the deed of transfer within 45  days  from  the
      grant of such permission.

   4. As the factual antecedents would further reveal,  
the  said  agreement
      was executed on the basis of a registered agreement executed in favour
      of the respondent  No.  3  by  the  original  allottee,  Smt.  Vandana
      Bhardwaj to sell the said plot.  
After expiry of a month  or  so,  the
      appellant enquired from the respondent No. 3  about  the  progress  of
      delivery of possession from the original  allottee,  but  he  received
      conflicting and contradictory replies which created doubt in his  mind
      and impelled him to rush to Noida and find out the real facts from the
      Greater Noida Authority.  
On due enquiry, he came to know  that  there
      was a registered agreement in favour of the  3rd  respondent  by  Smt.
      Vandana Bhardwaj; 
that a power of attorney had been  executed  by  the
      original allottee in favour of the  respondent  No.  2,  the  wife  of
      respondent No. 3; 
that the original allottee, to  avoid  any  kind  of
      litigation, had also executed a will in favour of the  respondent  No.
      3; and 
that the respondent No. 2 by virtue of the power  of  attorney,
      executed in her favour by the original allottee, had  transferred  the
      said property in favour of one  Monika  Goel  who  had  got  her  name
      mutated in the record of Greater  Noida  Authority.   
Coming  to  know
      about the aforesaid factual score, he demanded  refund  of  the  money
      from the respondents, 
but a total indifferent attitude was  exhibited,
      which compelled him to lodge an FIR  at  the  Police  Station,  Kasna,
      which gave rise to the Criminal Case No. 563 of 2009.

   5.  The  Investigating  Officer,  after  completing  the   investigation,
      submitted the final report stating that the case was of a civil nature
      and no criminal offence had been made  out.   The  appellant  filed  a
      protest petition before the learned Magistrate  stating,  inter  alia,
      that the accused persons had colluded with the  Investigating  Officer
      and the Station House Officer as a result of which  the  Investigation
      Officer, on 22.10.2009, had concluded the investigation observing that
      the dispute was of the civil nature and intended to submit  the  final
      report before the court.  The appellant coming to know about the  same
      submitted an application  before  the  concerned  Area  Officer,  who,
      taking note of the same, handed  over  the  investigation  to  another
      S.S.I. of  Police  on  24.11.2009.   The  said  Investigating  Officer
      recorded  statements  of  the  concerned  Sub-Registrar,   the   Chief
      Executive Officer of Greater Noida Authority, from whose statements it
      was evident that the accused persons were  never  the  owners  of  the
      property in question and the original allottee had not appeared in the
      Greater Noida Authority and not transferred any  documents.   He  also
      recorded the statement of original allottee who had  stated  that  the
      property was allotted in her name in 2005 and on a proposal being made
      by Raghuvinder Singh, a friend of her husband, to  sell  the  property
      she executed an agreement to sell in his favour and a General Power of
      Attorney in the name of his wife, Savita Singh, at  his  instance  but
      possession was not handed over to them.  He also examined  one  Sharad
      Kumar Sharma, who was a witness to the agreement to sell and the Power
      of Attorney executed by the original allottee,  and  said  Sharma  had
      stated that the General Power of Attorney was  executed  to  implement
      the agreement to sell executed in favour of  Raghuvinder  Singh.   The
      Investigating Officer obtained an affidavit from the complainant which
      was kept in the case diary, and on 25.2.2010 it was  recorded  in  the
      case diary that a criminal offence  had  been  made  out  against  the
      accused persons.  The case diary also evinced that there was an effort
      for settlement between the informant and the accused persons  and  the
      accused persons were ready to return the amount of Rs.1,05,00,000/- to
      the appellant.  On 10.3.2010, he made an entry  to  file  the  charge-
      sheet against the respondents under Sections 420, 406,  567,  468  and
      479 of the IPC.  At this stage, the  accused  persons  again  colluded
      with the previous Investigating Officer and the Station House  Officer
      and got the investigation transferred to  the  previous  Investigating
      Officer.  Coming to know about the  said  development,  the  appellant
      submitted a petition  before  the  Senior  Superintendent  of  Police,
      Gautam Budh Nagar on 6.5.2010, but before any steps could be taken  by
      the higher authority, the said Investigating Officer submitted a final
      report stating that no offence under the IPC had been  made  out.   In
      the protest petition it was urged that the whole case diary should  be
      perused and appropriate orders may be passed.

   6. On the basis of the aforesaid  protest  petition  the  Chief  Judicial
      Magistrate, on 5.6.2010, perused the final  report  submitted  by  the
      Investigating Officer, the entire case diary, the protest petition and
      the statements recorded under Section 161 of the CrPC by the  previous
      Investigating Officer and came to hold that even if a  suit  could  be
      filed, the fact situation prima facie  revealed  criminal  culpability
      and, accordingly, took cognizance under Sections 420 and  406  of  the
      IPC against the respondents  and  issued  summons  requiring  them  to
      appear before the court on 9.7.2010.

   7. Being dissatisfied with the  said  order,  the  respondents  preferred
      Criminal Revision No. 108 of 2010 before the  learned  Sessions  Judge
      contending, inter alia, that the FIR had been lodged with an  ulterior
      motive to pressurize the respondents to return the earnest  money  and
      the complainant had, in fact, committed breach of  the  terms  of  the
      agreement; that  the  allegations  made  in  the  FIR  could  only  be
      ascertained on the basis of evidence and documents by a civil court of
      competent jurisdiction regard being had to the nature of the  dispute;
      that the learned Magistrate had taken cognizance without any  material
      in the case diary; and  that  the  exercise  of  power  under  Section
      190(1)(b) of the CrPC was totally unwarranted in  the  case  at  hand.
      The revisional court scanned the material brought on  record,  perused
      the  case  diary  in  entirety,  took  note  of  the  conduct  of  the
      Investigating Officer who had submitted the final report stating  that
      the allegations did not constitute any criminal  offence  despite  the
      material brought on record during the course of investigation  by  the
      Investigating Officer, who was appointed at the instance of  the  Area
      Officer, scrutinized the substance of material collected to the effect
      that Raghuvinder Singh  had  no  right,  title  and  interest  in  the
      property and a General Power of Attorney was executed in favour of his
      wife to sell, transfer and convey all rights, title  and  interest  in
      the plot in question on behalf of the original allottee and  that  the
      husband and wife had concealed the material  factum  of  execution  of
      Power of Attorney from  the  complainant  and  opined  that  both  the
      accused persons had  fraudulent  and  dishonest  intention  since  the
      beginning of the negotiation with the complainant and, therefore,  the
      allegations prima facie constituted a criminal offence  and  it  could
      not be said that it was a pure and simple  dispute  of  civil  nature.
      Being of this view he gave the stamp of approval to the  order  passed
      by the learned Magistrate.

   8. The unsuccess in revision compelled the respondents  to  approach  the
      High Court in a writ petition and the Writ Court came to hold that  on
      the basis of  the  allegations  made  in  the  FIR  and  the  evidence
      collected during investigation it could not be said that  the  instant
      case is simpliciter a breach of contract not attracting  any  criminal
      liability as far as the husband was concerned and there  was  a  prima
      facie case triable for offences under Section 406 and 420 of the  IPC.
      However, while dealing with the allegations made against the wife, the
      High Court observed that there being no entrustment of any property by
      the complainant to her and further there being no privity of  contract
      between them, she was under no legal obligation  to  disclose  to  the
      complainant that she held a registered  Power  of  Attorney  from  the
      original allottee to sell and alienate the property  in  question  and
      such non-disclosure of facts could not be  said  to  have  constituted
      offence either under Section 406 or Section 420 of the IPC.  Being  of
      this view the High Court partly allowed the writ petition and  quashed
      the order taking cognizance and summoning of the wife, the  respondent
      No. 2 herein.

   9. We have heard Mr. Amit Khemka, learned counsel for the appellant,  and
      Mr. Chetan Sharma, learned senior counsel appearing for the respondent
      Nos. 2 and 3.

  10. It is submitted by Mr. Khemka learned counsel for the  appellant  that
      the High Court could not have  scrutinized  the  material  brought  on
      record as if  it  was  sitting  in  appeal  against  the  judgment  of
      conviction and also committed error in ignoring certain material facts
      which make the order  sensitively  susceptible.   It  is  his  further
      submission that the learned Sessions Judge had considered  the  entire
      gamut of facts and appositely opined that the order taking  cognizance
      could not be flawed but the High Court by taking note of the fact that
      there was no privity  of  contract  and  the  non-disclosure  was  not
      material has completely erred in its conclusion and, hence, the  order
      deserves to be lancinated.

  11. Mr. Chetan Sharma, learned senior  counsel,  resisting  the  aforesaid
      contentions, canvassed that mere presence of the respondent No.  2  at
      the time of signing of the agreement to sell does  not  amount  to  an
      offence under Section 420 of the IPC as she did not sign the  document
      nor did she endorse the same as a witness.  It is urged by him that no
      criminal liability can be fastened on her, for the sine  qua  non  for
      attracting criminality is to show dishonest intention right  from  the
      very inception which is non-existent in  the  case  at  hand.   It  is
      submitted by him that if the criminal action is  allowed  to  continue
      against her that would put a premium on a commercial strategy  adopted
      by the appellant in roping a lady only to have more  bargaining  power
      in the matter to arrive at a settlement despite the breach of contract
      by him.  The learned senior counsel would  further  contend  that  the
      appellant has taken contradictory stands inasmuch as in one way he had
      demanded the forfeited amount and the other way lodged an FIR  to  set
      the criminal law in motion which is  impermissible.   To  bolster  the
      said contentions reliance has been placed on the judgments rendered in
      Hridya Rajan Pd. Verma & others v.  State  of  Bihar  and  another[1],
      Murari Lal Gupta v. Gopi Singh[2] and B. Suresh Yadav v.  Sharifa  Bee
      and another[3].

  12. At the very outset, it is necessary to state that on a perusal of  the
      FIR, the  protest  petition  and  the  order  passed  by  the  learned
      Magistrate,  it  is  demonstrable  that  at  various  stages  of   the
      investigation different views  were  expressed  by  the  Investigating
      Officers and the learned  Magistrate  has  scrutinized  the  same  and
      taking note of the allegations had exercised the power to  reject  the
      final report and take cognizance.  The court taking cognizance and the
      revisional court have expressed the view that both the respondents had
      nurtured dishonest intentions from the very beginning  of  making  the
      negotiation  with  the  complainant  and  treated  non-disclosure   of
      execution of Power of Attorney in  favour  of  the  respondent  No.  2
      herein by the original owner as a material omission as  a  consequence
      of which damage had been  caused  to  the  complainant.   The  learned
      counsel for the  appellant  would  submit  that  the  High  Court  has
      misguided itself by observing that there was  no  entrustment  of  any
      property to the wife and further there was no privity of contract  and
      non-disclosure on her part do not constitute an offence.  The  learned
      senior counsel for  the  respondent  has  highlighted  the  factum  of
      absence of privity of contract.  Regard being had to  the  allegations
      brought on record, the question  that  emerges  for  consideration  is
      whether the High Court is justified in  exercising  its  extraordinary
      jurisdiction  to  quash  the  order  taking  cognizance  against   the
      respondent No. 2 herein.

  13. At this juncture, we may note that Raghuvinder Singh,  respondent  No.
      3, had filed SLP (Crl) No. 3894 of 2011 which has  been  dismissed  on
      13.5.2011.

  14. As advised at present we are inclined to discuss the  decisions  which
      have been commended to us  by  the  learned  senior  counsel  for  the
      respondent.  In Hridya Rajan Pd. Verma (supra) a complaint  was  filed
      that the accused persons therein had  deliberately  and  intentionally
      diverted and induced the respondent society  and  the  complainant  by
      suppressing certain facts and giving false and  concocted  information
      and assurances to the complainant so as to make him believe  that  the
      deal was a fair one and free from troubles.   The  further  allegation
      was that the accused person did  so  with  the  intention  to  acquire
      wrongful gain for themselves and to cause wrongful loss to the Society
      and the complainant and they had induced the complainant to enter into
      negotiation and get advance consideration money  to  them.   The  two-
      Judge Bench referred to the judgment in State  of  Haryana  v.  Bhajan
      Lal[4] wherein this Court has enumerated certain categories  of  cases
      by way of illustration wherein the extraordinary power  under  Article
      226 or the inherent powers under Section 482  of  the  CrPC  could  be
      exercised either to prevent abuse of  the  process  of  the  court  or
      otherwise to secure the ends of justice.  The Bench also  referred  to
      the decisions in Rupen Deol Bajaj (Mrs.) v. Kanwar Pal Singh  Gill[5],
      Rajesh Bajaj v. State NCT of Delhi[6] and  State  of  Kerala  v.  O.C.
      Kuttan[7] wherein the principle laid down in Bhajan  Lal  (supra)  was
      reiterated.  The Court posed the question  whether  the  case  of  the
      appellants therein came under any  of  the  categories  enumerated  in
      Bhajan Lal (supra) and whether the allegations made in the FIR or  the
      complaint if accepted in entirety did make  out  a  case  against  the
      accused-appellants therein.  For the aforesaid purpose advertence  was
      made to offences alleged against the appellants,  the  ingredients  of
      the offences and the averments made in the complaint.  The Court  took
      the view that main offence alleged  to  have  been  committed  by  the
      appellants is cheating  punishable  under  Section  420  of  the  IPC.
      Scanning the definition of ‘cheating’ the Court opined that there  are
      two separate classes of acts which the persons deceived may be induced
      to do.   In  the  first  place  he  may  be  induced  fraudulently  or
      dishonestly to deliver any property to any person.  The  second  class
      of acts set-forth in the section  is  the  doing  or  omitting  to  do
      anything which the person deceived would not do or omit to  do  if  he
      were not so deceived.  In the first class of cases the  inducing  must
      be fraudulent or dishonest.  In the second class of acts, the inducing
      must be intentional but not fraudulent or dishonest.  Thereafter,  the
      Bench proceeded to state as follows: -

           “16.  In determining the question it has to be kept in mind that
           the distinction between mere breach of contract and the  offence
           of cheating is a fine one.  It depends upon the intention of the
           accused at the time of inducement which may  be  judged  by  his
           subsequent conduct but for this subsequent conduct  is  not  the
           sole test.  Mere breach of contract cannot give rise to criminal
           prosecution  for  cheating  unless   fraudulent   or   dishonest
           intention is shown right at the beginning  of  the  transaction,
           that is  the  time  when  the  offence  is  said  to  have  been
           committed.  Therefore, it is the intention which is the gist  of
           the offence.   To  hold  a  person  guilty  of  cheating  it  is
           necessary to show that he had fraudulent or dishonest  intention
           at the time of making the promise.  From  his  mere  failure  to
           keep up promise subsequently such a culpable intention right  at
           the beginning, that is, when  he  made  the  promise  cannot  be
           presumed.”



  15. After laying down the principle the Bench referred  to  the  complaint
      and opined that reading the averments in the complaint in entirety and
      accepting the allegations to be true, the ingredients  of  intentional
      deception on the part of the accused right at  the  beginning  of  the
      negotiations for the transaction had neither been expressly stated nor
      indirectly suggested in the complaint.  All that the respondent No.  2
      had alleged against the appellants was that they did not  disclose  to
      him that one of their brothers had filed a partition  suit  which  was
      pending.  The requirement that the information was  not  disclosed  by
      the appellants intentionally in order to make  the  respondent  No.  2
      part with property was not alleged expressly or even impliedly in  the
      complaint.  Therefore, the core postulate of  dishonest  intention  in
      order to deceive the complainant-respondent No. 2  was  not  made  out
      even accepting all the averments in the complaint on their face  value
      and, accordingly, ruled  that  in  such  a  situation  continuing  the
      criminal proceeding against the accused would be an abuse  of  process
      of the Court.

  16. From the aforesaid decision it is quite clear that this Court recorded
      a finding that there was no averment in the complaint  that  intention
      to deceive on the part of  the  accused  was  absent  right  from  the
      beginning of the negotiation of the transaction as the said allegation
      had neither been  expressly  made  nor  indirectly  suggested  in  the
      complaint.  This Court took note of the fact that only  non-disclosure
      was that one of their brothers had filed a partition  suit  which  was
      pending and the  allegation  that  such  a  disclosure  was  not  made
      intentionally to deceive the complainant was absent.  It is worthy  to
      note that this Court referred to certain averments  in  the  complaint
      petition and scrutinized the allegations and  recorded  the  aforesaid
      finding.  The present case, as we  perceive,  stands  on  a  different
      factual matrix altogether.  The learned Sessions Judge has returned  a
      finding that there was intention to deceive from the  very  beginning,
      namely, at the time of negotiation but the High  Court  has  dislodged
      the same on the foundation  that  the  respondent  No.  2  was  merely
      present and there was no privity of contract between  the  complainant
      and her.  We will advert to the said factual analysis at a later stage
      after discussing the other authorities which have been placed reliance
      upon by the learned senior counsel for the respondents.

  17. In Murari Lal Gupta (supra) a two-Judge  Bench  quashed  the  criminal
      complaint instituted under Sections 406 and 420  of  the  IPC  on  the
      following analysis: -

           “The complaint does not make any averment so  as  to  infer  any
           fraudulent or dishonest  inducement  having  been  made  by  the
           petitioner pursuant to which  the  respondent  parted  with  the
           money.  It is not the case of the respondent that the petitioner
           does not have the  property  or  that  the  petitioner  was  not
           competent to enter into an agreement to sell or could  not  have
           transferred title in the property  to  the  respondent.   Merely
           because an agreement to sell was entered  into  which  agreement
           the petitioner failed to honour, it  cannot  be  said  that  the
           petitioner has cheated the respondent.  No case for  prosecution
           under Section 420 or Section 406 IPC  is  made  out  even  prima
           facie.  The complaint filed by the respondent and  that  too  at
           Madhepura against the petitioner, who is a  resident  of  Delhi,
           seems to be an attempt to pressurize the petitioner  for  coming
           to terms with the respondent.”



      In our considered opinion the factual position in the  aforesaid  case
is demonstrably different and, hence, we have no hesitation in stating  that
the said decision is not applicable to the case at hand.

  18. In B. Suresh Yadav (supra) the complainant, who was defendant  in  the
      suit, had filed a written statement from which it  was  manifest  that
      she at all material times was aware of the purported demolition of the
      rooms standing on the suit property.  It was contended in the  written
      statement that the suit properties were different  from  the  subject-
      matter of the deed of sale.  After filing the  written  statement  the
      respondent had filed the complaint under Section 420 of the IPC.   The
      Court took note of the fact that there existed a dispute as to whether
      the property whereupon the said two rooms were allegedly situated  was
      the same property forming the subject-matter of the deed  of  sale  or
      not and a civil suit had already been filed  pertaining  to  the  said
      dispute.  The Court also took note of the fact that  at  the  time  of
      execution of the sale deed the accused  had  not  made  any  false  or
      misleading representation and there was no omission on his part to  do
      anything which he could have done.   Under  these  circumstances,  the
      Court opined that the dispute between  the  parties  was  basically  a
      civil dispute.  It is apt to note here that the Court also opined that
      when a stand had been taken in a complaint petition which is  contrary
      to or inconsistent with the stand taken by him in a  civil  suit,  the
      same assumes significance and had there been an  allegation  that  the
      accused got the said two rooms demolished and concealed the said  fact
      at the time of execution of the deed of sale, the  matter  would  have
      been different.  Being of this view, this Court quashed  the  criminal
      proceeding as that did amount to abuse of the process  of  the  court.
      On an x-ray of the factual score, it can safely  be  stated  that  the
      said pronouncement renders no assistance to the lis in question.

  19. Before we proceed to scan and analyse the material brought  on  record
      in the case at hand, it is seemly  to  refer  to  certain  authorities
      wherein the ingredients of cheating have been highlighted.   In  State
      of Kerala v. A. Pareed Pillai and another[8], a two-Judge Bench  ruled
      that 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 and such a dishonest intention cannot be inferred from a  mere
      fact that he could not subsequently fulfil the promise.
  20. In G.V. Rao v. L.H.V. Prasad and others[9], this Court has held  thus:
      -
           “7. As mentioned above, Section 415 has two parts. While in  the
           first part, the  person  must  “dishonestly”  or  “fraudulently”
           induce the complainant to deliver any property;  in  the  second
           part, the person should intentionally induce the complainant  to
           do or omit to do a thing. That is to say,  in  the  first  part,
           inducement must be dishonest or fraudulent. In the second  part,
           the inducement should be intentional. As observed by this  Court
           in Jaswantrai Manilal Akhaney v. State of  Bombay[10]  a  guilty
           intention is an essential ingredient of the offence of cheating.
           In order, therefore, to secure conviction of a  person  for  the
           offence of cheating, “mens rea” on the part of that person, must
           be established. It was also observed in Mahadeo Prasad v.  State
           of W.B.[11] that in order to constitute the offence of cheating,
           the intention to deceive should be in existence at the time when
           the inducement was offered.”


  21. In S.N. Palanitkar and others v. State of Bihar  and  another[12],  it
      has been laid down that in order to constitute an offence of cheating,
      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 or dishonest intention at the time of making  the  promise,
      to say that he committed an act of cheating.  A mere failure  to  keep
      up promise subsequently cannot  be  presumed  as  an  act  leading  to
      cheating.

22.   In the said case  while  dealing  with  the  ingredients  of  criminal
breach of trust and cheating, the Bench observed thus: -

           “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 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.”



23. Coming to the facts of the present case, it is luminicent from  the  FIR
   that the allegations against the respondent No. 2 do not only pertain to
   her presence but also about her total silence and  connivance  with  her
   husband and transfer of property using Power of Attorney  in  favour  of
   Monika Goel.  It is also graphically clear that the complainant had made
   allegations that Raghuvinder Singh and his wife, Savita Singh,  had  met
   him at the site, showed the registered agreement and the cash and cheque
   were given to them at that time.  It is also mentioned in the  FIR  that
   on 28.7.2008, Savita Singh had received the possession of the said  plot
   and on the same day it was transferred in the name of Monika  Goel.   It
   is also reflectible that on  28.2.2007,  Raghuvinder  Singh  and  Savita
   Singh had got prepared and registered two documents in the office of the
   Sub-Registrar consisting one agreement to sell in favour of  Raghuvinder
   Singh and another General Power of Attorney in favour of the wife.   The
   allegation of collusion by the husband and wife has clearly been stated.
    During the investigation, as has  been  stated  earlier,  many  a  fact
   emerged but the same were ignored and a final report was submitted.   In
   the protest petition  the  complainant  had  asseverated  everything  in
   detail about what emerged  during  the  course  of  investigation.   The
   learned Chief Judicial Magistrate after perusal of the  case  diary  and
   the FIR has expressed the view that a case under Sections 406 and 420 of
   the IPC had been made out against both the accused persons.  The learned
   Sessions  Judge,  after  referring  to  the  ingredients  and  the  role
   ascribed, concurred with the same.  The High Court  declined  to  accept
   the said analysis on the ground that it was mere  presence  and  further
   there was no  privity  of  contract  between  the  complainant  and  the
   respondent No. 2.

24. At this stage,  we  may  usefully  note  that  some  times  a  case  may
   apparently look to be of  civil  nature  or  may  involve  a  commercial
   transaction but such civil disputes or commercial  disputes  in  certain
   circumstances may also contain ingredients of criminal offences and such
   disputes have to be entertained  notwithstanding  they  are  also  civil
   disputes.  In this context, we may reproduce  a  passage  from  Mohammed
   Ibrahim and others v. State of Bihar and another[13]: -

           “8.   This Court has time  and  again  drawn  attention  to  the
           growing tendency of the  complainants  attempting  to  give  the
           cloak of a criminal offence to matters which are essentially and
           purely civil in nature, obviously either to  apply  pressure  on
           the accused, or out of enmity towards the accused, or to subject
           the accused to harassment.  Criminal courts should  ensure  that
           proceedings before it are not used for  settling  scores  or  to
           pressurize parties to settle civil disputes.  But  at  the  same
           time, it should be noted that several disputes of a civil nature
           may also contain the ingredients of criminal offences and if so,
           will have to be tried as criminal offences, even  if  they  also
           amount to civil  disputes.  (See  G.  Sagar  Suri  v.  State  of
           U.P.[14] and Indian Oil Corpn. v. NEPC India Ltd.[15])”



25. In this context we may usefully refer to  a  paragraph  from  All  Cargo
   Movers (I) Pvt. Ltd. V. Dhanesh Badarmal Jain & Anr.[16]

           “…..Where a civil suit is pending and the complaint petition has
           been filed one year after filing of the civil suit, we  may  for
           the purpose of finding out as to whether  the  said  allegations
           are prima facie cannot notice the  correspondence  exchanged  by
           the parties and other admitted documents. It is one thing to say
           that the Court at this juncture would not consider  the  defence
           of the  accused  but  it  is  another  thing  to  say  that  for
           exercising the  inherent  jurisdiction  of  this  Court,  it  is
           impermissible also to look to the admitted  documents.  Criminal
           proceedings should not be encouraged, when it  is  found  to  be
           mala fide or otherwise an abuse of the  process  of  the  court.
           Superior Courts while exercising this power should  also  strive
           to serve the ends of justice.”



26. In Rajesh Bajaj v. State NCT of  Delhi  and  others[17],  while  dealing
   with a case where the High Court  had  quashed  an  F.I.R.,  this  Court
   opined that the facts narrated in the complaint petition  may  reveal  a
   commercial transaction or a money transaction,  but  that  is  hardly  a
   reason for holding that the offence of cheating would elude from such  a
   transaction.  Proceeding further, the Bench observed thus: -
           “11. The crux of the postulate is the intention  of  the  person
           who induces the victim of his representation and not the  nature
           of the transaction which would  become  decisive  in  discerning
           whether there was commission of offence or not. The  complainant
           has stated in the body of the complaint that he was  induced  to
           believe that the respondent would honour payment on  receipt  of
           invoices, and that  the  complainant  realised  later  that  the
           intentions of the respondent were not clear. He  also  mentioned
           that the respondent after receiving the goods had sold  them  to
           others and still he did not pay the money. Such averments  would
           prima  facie  make  out  a  case  for   investigation   by   the
           authorities.”


27. We have referred to the aforesaid decisions in the  field  to  highlight
   about the role of the Court while dealing  with  such  issues.   In  our
   considered opinion the present case falls in the category  which  cannot
   be stated at this stage to be purely civil in nature on the basis of the
   admitted documents or the allegations made in the FIR or what  has  come
   out in the investigation or for that matter what has been stated in  the
   protest petition.  We are disposed to think that prima  facie  there  is
   allegation that there was a guilty intention to induce  the  complainant
   to part with money.  We may hasten to clarify that  it  is  not  a  case
   where a promise initially made could not lived up to  subsequently.   It
   is not a case where it could be said that even  if  the  allegations  in
   entirety are accepted, no case is made out.  Needless to emphasise,  the
   High Court, while exercising power under Article 226 of the Constitution
   or Section 482 of the CrPC, has to adopt a very cautious  approach.   In
   Central Bureau of Investigation v.  Ravi  Shankar  Srivastava,  IAS  and
   another[18],  the  Court,  after  referring  to  Janata  Dal   v.   H.S.
   Chowdhary[19] and Raghubir  Saran  (Dr.)  v.  State  of  Bihar[20],  has
   observed that the powers possessed by the High Court under  Section  482
   of the IPC are very wide and the very plentitude of the  power  requires
   great caution in its exercise.  The court must be careful  to  see  that
   its decision in exercise of this power is based on sound principles  and
   such inherent powers should not be  exercised  to  stifle  a  legitimate
   prosecution.  This Court has further stated that it is  not  proper  for
   the High Court to analyse the case of the complainant in  the  light  of
   all probabilities in order to determine whether a  conviction  would  be
   sustainable and on  such  premises  arrive  at  a  conclusion  that  the
   proceedings are to be quashed.  It has been further pronounced  that  it
   would be erroneous to assess the material before it  and  conclude  that
   the complaint could not be proceeded with.  The Bench  has  opined  that
   the meticulous analysis of the case is not necessary and  the  complaint
   has to be read as a whole and if it appears that on consideration of the
   allegations  in  the  light  of  the  statement  made  on  oath  of  the
   complainant  that  the  ingredients  of  the  offence  or  offences  are
   disclosed and there is no material to show that the  complaint  is  mala
   fide,  frivolous  or  vexatious,  in  that  event  there  would  be   no
   justification for interference by the High Court.

28. In R. Kalyani v. Janak C. Mehta and others[21], after referring  to  the
   decisions in Hamida v. Rashid[22] and State of  Orissa  v.  Saroj  Kumar
   Sahoo[23], this Court eventually culled out the following  propositions:
   -

           “15.  Propositions of law which emerge from the  said  decisions
           are:

           a. The High Court ordinarily would  not  exercise  its  inherent
              jurisdiction  to  quash  a  criminal   proceeding   and,   in
              particular, a first information report unless the allegations
              contained therein, even if given face value and taken  to  be
              correct in their entirety, disclosed no cognizable offence.

           b. For the said purpose the  Court,  save  and  except  in  very
              exceptional circumstances, would not  look  to  any  document
              relied upon by the defence.

           c. Such a power should be  exercised  very  sparingly.   If  the
              allegations  made  in  the  FIR  disclose  commission  of  an
              offence, the Court shall not go beyond the same and  pass  an
              order in favour of the accused to hold absence  of  any  mens
              rea or actus reus.

           d. If the allegation discloses a  civil  dispute,  the  same  by
              itself may  not  be  a  ground  to  hold  that  the  criminal
              proceedings should not be allowed to continue.”



29. It is worth noting  that  it  was  observed  therein  that  one  of  the
   paramount duties of the superior court is to  see  that  person  who  is
   absolutely innocent is not subjected to prosecution and  humiliation  on
   the basis of a false and wholly untenable complaint.

30. Recently in Gian Singh v. State of Punjab and another[24] a  three-Judge
   Bench has observed that: -

           “55.  In the very nature of its constitution, it is the judicial
           obligation of the High Court  to  undo  a  wrong  in  course  of
           administration  of  justice  or  to  prevent   continuation   of
           unnecessary judicial process.  This  is  founded  on  the  legal
           maxim quando lex aliquid alicui concedit, conceditur et id  sine
           qua res ipsa esse non potest.   The  full  import  of  which  is
           whenever anything is authorised, and especially if, as a  matter
           of duty, required to be done by law, it is found  impossible  to
           do that thing unless something else not  authorised  in  express
           terms be also done, may also be done, then that  something  else
           will be supplied by necessary intendment.  Ex  debito  justitiae
           is inbuilt in such exercise; the  whole  idea  is  to  do  real,
           complete and substantial justice for which it exists.  The power
           possessed by the High Court under Section 482 of the Code is  of
           wide amplitude but requires  exercise  with  great  caution  and
           circumspection.”



31. Applying the aforesaid parameters we have no  hesitation  in  coming  to hold that neither the FIR  nor  the  protest  petition  was  mala  fide, frivolous or vexatious.
It is  also  not  a  case  where  there  is  no substance in the complaint.

The manner in which the  investigation  was
   conducted by the officer who eventually filed the final report  and 
 the
   transfer of the investigation earlier to another officer who had  almost
   completed the investigation and 
the entire case  diary  which  has  been
   adverted to in detail in the protest petition prima facie  makes  out  a
   case against the husband  and  the  wife  regarding  collusion  and  the
   intention to cheat from the very beginning, inducing him to hand over  a
   huge sum of money to both of them.  
Their conduct of not stating so many
   aspects, namely, the Power of Attorney executed by the  original  owner,
   the will and also the sale effected by the wife in the  name  of  Monika
   Singh on 28.7.2008 cannot be brushed aside at this stage.  
Therefore, we
   are disposed  to  think  that  the  High  Court,  while  exercising  the
   extraordinary jurisdiction, had not proceeded on the sound principles of
   law for quashment of order taking cognizance.  
The High  Court  and  has
   been guided by the non-existence of  privity  of  contract  and  without
   appreciating the factual scenario has observed that the wife was  merely
   present.
Be it noted, if the wife had nothing to do  with  any  of  the
   transactions with the original owner and was not aware  of  the  things, possibly the view of the High Court could have gained  acceptation,  but when the wife had the Power of Attorney in her favour and was  aware  of  execution of the will, had accepted the money  along  with  her  husband from the complainant, it is extremely difficulty to say that an innocent person is dragged to face a vexatious litigation  or  humiliation.   
The
   entire conduct of the respondent Nos. 2 and 3 would show  that  a  prima
   facie case is made out and allegations  are  there  on  record  in  this
   regard  that  they  had  the  intention  to  cheat  from  the  stage  of
   negotiation.  That being the position, the decision in Hridya Rajan  Pd.
   Verma & others (supra) which is commended to us by Mr.  Sharma,  learned
   senior counsel, to which we have adverted to earlier,  does  not  really
   assist the respondents and we say so after making the  factual  analysis
   in detail.

32. In view of our aforesaid analysis we allow the  appeal,  set  aside  the
   order passed by the High Court and direct the Magistrate to  proceed  in
   accordance with law.
However,  we  may  clarify  that  we  may  not  be
   understood to have expressed any opinion on the merits of the  case  one
   way or the other and our observations must be construed  as  limited  to
   the order taking cognizance and nothing more  than  that.   The  learned
   Magistrate shall  decide  the  case  on  its  own  merit  without  being
   influenced by any of our observations as the same have  been  made  only
   for the purpose of holding that the order of cognizance is  prima  facie
   valid and did not warrant interference by the High Court.

                                                             ……………………………….J.
                            [K. S. Radhakrishnan]



                                                             ……………………………….J.
                                                     [Dipak Misra]

New Delhi;
January 10, 2013

-----------------------
[1]    AIR 2000 SC 2341
[2]    (2006) 2 SCC (Cri) 430
[3]    (2007) 13 SCC 107
[4]    1992 Supp (1) SCC 335
[5]    AIR 1996 SC 309
[6]    (1999) 3 SCC 259
[7]    AIR 1999 SC 1044
[8]    AIR 1973 SC 326
[9]    (2000) 3 SCC 693
[10]   AIR 1956 SC 575
[11]   AIR 1954 SC 724
[12]   AIR 2001 SC 2960
[13]   (2009) 8 SCC 751
[14]   (2000) 2 SCC 636
[15]   (2006) 6 SCC 736
[16]   AIR 2008 SC 247
[17]   AIR 1999 SC 1216
[18]   (2006) 7 SCC 188
[19]   (1992) 4 SCC 305
[20]   AIR 1964 SC 1
[21]   (2009) 1 SCC 516
[22]   (2008) 1 SCC 474
[23]   (2005) 13 SCC 540
[24]   (2012) 10 SCC 303

-----------------------
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