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
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[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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