Sections 406, 418 and 420 IPC =The Apex Court in another expression of V.P.Shrivastava v. Indian Explosives Limited and others held in relation to the offence of cheating and criminal breach of trust that to hold a person guilty of cheating, it must be necessary to show with averments that at the time of making promise, the accused had fraudulent or dishonest intention to deceive or to induce person so deceived to do something which he would not otherwise do and in the absence of such culpable intention right at the time of entering into agreement that cannot be presumed merely from failure to keep the promise subsequently and in the absence of specific averment in the report or complaint, the presumption is unsustainable and thereby the proceedings for cheating and criminal breach of trust alleged no way sustain and liable to be quashed.

HONBLE Dr. JUSTICE B. SIVA SANKARA RAO      

CRIMINAL PETITION Nos.2715  of 2013  

28-01-2016

J.Sesha Ratna Kumar (Crl.P.No.2715 of 2013) & A.Suchitra (Crl.P.No.2716 of
2013).Petitioners

State of A.P., Rep. by its Public Prosecutor,  High Court of A.P.,  Hyderabad
and anotherRespondents  

Counsel for Petitioners:Smt. A.Anasuya

Counsel for Respondent No.1:  Public Prosecutor (A.P.)
 Counsel for Respondent No.2 : Mr.Srinivas Velgapudi

<GIST:

>HEAD NOTE:  

? CITATIONS:


HONBLE Dr. JUSTICE B. SIVA SANKARA RAO      

CRIMINAL PETITION Nos.2715 and 2716 of 2013  

COMMON ORDER :    
     The petitioner-Smt.J.Sesha Ratna Kumari in Crl.P.No.2715 of
2013 is the sole accused in C.C.No.307 of 2012 on the file of the
Additional Judicial First Class Magistrate, Sangareddy, where the
learned Magistrate has taken cognizance for the offences punishable
under Sections 418, 420 and 406 IPC, which is an out come of a
private complaint of the 2nd respondent-de facto complainant-
P.Venkatesham dated 23.06.2011.  The said private complaint was
referred to Ramachandrapuram Police Station under Section 156(3)
Cr.P.C. by the learned Magistrate for investigation, from which Crime
No.206 of 2011 was registered and after investigation police filed the
final report.  After taking cognizance for the offences supra, the
learned Magistrate issued summons and impugning the same,  
Crl.P.No.2715 of 2013 is filed.

1(a).   The petitioner-Smt.A.Suchitra in Crl.P.No.2716 of 2013 is the
sole accused in C.C.No.308 of 2012 on the file of the Additional
Judicial First Class Magistrate, Sangareddy, where the learned
Magistrate has taken cognizance for the offences punishable under
Sections 418, 420 and 406 IPC, which is an out come of a private
complaint of the 2nd respondent-de facto complainant-P.Venkatesham
dated 23.06.2011.  The said private complaint was referred to
Ramachandrapuram Police Station under Section 156(3) Cr.P.C. by
the learned Magistrate for investigation, from which Crime No.207 of
2011 was registered and after investigation police filed the final
report.  After taking cognizance for the offences supra, the learned
Magistrate issued summons and impugning the same, Crl.P.No.2716  
of 2013 is filed.

2(a).   The private complaint of the de facto complainant dated
23.06.2011 in registering the crime from reference by the learned
Magistrate supra, in nut shell of C.C.No.307 of 2012 is that the de
facto complainant is a registered Company engaged in construction
and development of residential or commercial complexs with own
reputation and the petitioner-J.Sesha Ratna Kumari-accused
represented as owner of Plot Nos.82 to 84, 132 and 153, totally
admeasuring 1,015 sq. yards comprising of Sy.No.198 of Ameenpur
Village, Patancheru Mandal, Medak District, for commercial use in
the approved lay out of HUDA.  Originally the said plots were
agricultural lands later converted into plots and sold the same to
individuals and the above four plots are the remaining after alienation
and when accused supra was searching for purchasers or developers, 
mediators introduced the de facto complainant and accused impressed 
upon the de facto complainant about the viability of plots for
development into independent houses  and induced and persuaded the  
de facto complainant to enter into agreement with petitioner to
construct duplex houses on mutually agreed terms and from that
representations, the de facto complainant entered into registered deed-
cum-General Power of Attorney (GPA) vide document No.9172 of  
2008 dated 01.07.2008.  As per the terms, the de facto complainant
should construct duplex houses and share the constructed area into
agreed ratio and the de facto complainant paid Rs.2,00,000/- through
Cheque bearing No.077028 dated 01.07.2008, to the petitioner as
refundable deposit.  After entering said agreement, the de facto
complaint applied for permission on 18.08.2008 and 05.09.2008 to
construct the residential houses.  The Ameenpur Gram Panchayath, by
letter dated 11.09.2008, informed the de facto complainant that
permission will be considered only after obtaining necessary clearance
from the concerned authorities after verifying full bank level of
Pedda Cheruvu and when the de facto complainant enquired with the
petitioner in this regard as to whether the plots ever got inundated
with flood waters of the said Cheruvu, the accused expressed
ignorance, though informed they are holding particular lands for more
than 15 years and never witnessed flood water into the lands.  The
Ameenpur Gram Panchayat never intimated the de facto complainant
with regard to the grant or refusal of permission to construct
residential houses for long time.  Later, the de facto complainant came
to know that Ameenpur Gram Panchayath addressed letter dated  
23.08.2008 to the Deputy Executive Engineer, Irrigation Department,
for information regarding the full tank level and whether the lands in
Sy.Nos.198 of Ameenpur Village fall within the full tank level of
Pedda Cheruvu and the Deputy Executive Engineer did not respond to 
the request of Ameenpur Gram Panchayath for a long time and the de 
facto complainant even addressed a letter dated 23.06.2010 to the
Deputy Executive Engineer, I.B. Sub Division, Irrigation Department,
Sangareddy, for information in this regard.  On such requisition, the
Deputy Executive Engineer, I.B. Sub Division, conducted survey of
lands of Sy.No.198 of Ameenpura Village with respect to full tank
level of Pedda Cheruvu and to the astonishment of the de facto
complainant, the Deputy Executive Engineer, I.B. Sub Division,
issued a letter dated 25.01.2011 stating that entire extent of Sy.No.198
admeasuring Ac.16.13 guntas except Ac.0.29 guntas fall within the
full tank level of Pedda Cheruvu and in fact all the plots which are
subject matter of agreement between the de facto complainant and the
petitioner fall within the full tank level of Pedda Cheruvu.
2(a1)   It is further stated in the complaint that in the Mansoon season
of the year 2010 was very vigorous and most of the tanks and kuntas
were full and over flowing and during that season, Pedda Cheruvu
was full and over flowing for a long time, which was witnessed by the
de facto complainant and to his astonishment, the first floor portions
of the constructed houses of third parties were submerged in flood
water for two or three weeks therein and that was also photographed
by the de facto complainant.  When the de facto complainant
confronted with the accused about the situation and the certificate
issued by the Irrigation Department with regard to full tank level of
pedda cheruvu and consequent refusal by Gram Panchayath of
Ameenpur Village, the accused expressed ignorance, therefore, the de
facto complainant got issued a legal notice dated 18.06.2009 to refund
the deposited amount for which the accused did not reply and with a
malafide intention to defraud the de facto complainant intentionally
suppressed the vital information and induced to enter into the
development agreements-cum-GPA only to extract money from the de  
facto complainant by inducing and falsely represented to enter into
above agreement.  If the accused has not suppressed such vital
information to the de facto complainant, the de facto complainant
would not pay such heavy amounts to the accused and in fact would
have withdrawn from the proposed agreement with the accused and
since received money from the de facto complainant is refundable
deposit that is not returning, thereby the accused committed the
offence of breach of trust under Section 406 IPC and also committed
the offences punishable under Sections 418 IPC and 420 IPC by
cheating and dishonest inducement to enter into the agreement-cum-
GPA to cause wrongful loss to the de facto complainant.  Hence, to
refer the complaint to police for investigation.

2(b).   The private complaint of the de facto complainant dated
23.06.2011 in registering the crime from reference by the learned
Magistrate supra, in nut shell of C.C.No.308 of 2012 is that the de
facto complainant is a registered Company engaged in construction
and development of residential of commercial complex with own
reputation and the accused-A.Suchithra represented as owner of Plot
Nos.142, 143 and 153, totally admeasuring 784
sq. yards comprising of Sy.No.198 of Ameenpur Village, Patancheru
Mandal, Medak District, for commercial use in the approved lay out
of HUDA.  Originally the said plots were agricultural lands later
converted into plots and sold the same to individuals and the above
three plots are the remaining after alienation and when accused was
searching for purchasers or developers, mediators introduced the de
facto complainant and accused impressed upon the de facto
complainant about the viability of plots for development into
independent houses and induced and persuaded the de facto
complainant to enter into agreement to construct duplex houses on
mutually agreed terms and from that representations, the de facto
complainant entered into registered deed-cum-General Power of
Attorney (GPA) vide document No.9173 of 2008 dated 01.07.2008.
As per the terms, the de facto complainant should construct duplex
houses and share the constructed area into agreed ratio and the de
facto complainant paid Rs.2,00,000/- through Cheque bearing
No.077079 to the accused as refundable deposit.  After entering said
agreement, the de facto complaint applied for permission on
18.08.2008 and 05.09.2008 to construct the residential houses.  The
Ameenpur Gram Panchayath, by letter dated 11.09.2008, informed the
de facto complainant that permission will be considered only after
obtaining necessary clearance from the concerned authorities after
verifying full bank level of Pedda Cheruvu and when the de facto
complainant enquired with the accused in this regard as to whether the
plots ever got inundated with flood waters of the said Cheruvu, the
accused expressed ignorance though informed they are holding
particular lands for more than 15 years and never witnessed flood
water into the lands.  The Ameenpur Gram Panchayat never intimated
the de facto complainant with regard to the grant or refusal of
permission to construct residential houses for long time.  Later, the de
facto complainant came to know that Ameenpur Gram Panchayath  
addressed letter dated 23.08.2008 to the Deputy Executive Engineer,
Irrigation Department, for information regarding the full tank level
and whether the lands in Sy.Nos.198 of Ameenpur Village fall within
the full tank level of Pedda Cheruvu and the Deputy Executive
Engineer did not respond to the request of Ameenpur Gram
Panchayath for a long time and the de facto complainant even
addressed a letter dated 23.06.2010 to the Deputy Executive Engineer,
I.B. Sub Division, Irrigation Department, Sangareddy, for information
in this regard.  On such requisition, the Deputy Executive Engineer,
I.B. Sub Division, conducted survey of lands of Sy.No.198 of
Ameenpura Village with respect to full tank level of Pedda Cheruvu
and to the astonishment of the de facto complainant, the Deputy
Executive Engineer, I.B. Sub Division, issued a letter dated
25.01.2011 stating that entire extent of Sy.No.198 admeasuring
Ac.16.13 guntas except Ac.0.29 guntas fall within the full tank level
of Pedda Cheruvu and in fact all the plots which are subject matter of
agreement between the de facto complainant and the petitioner fall
within the full tank level of Pedda Cheruvu.
2(b1)   It is further stated in the complaint that in the Mansoon season
of the year 2010 was very vigorous and most of the tanks and kuntas
were full and over flowing and during that season Pedda Cheruvu was
full and over flowing for a long time, which was witnessed by the de
facto complainant and to his astonishment, the first floor portions of
the constructed houses of third parties were submerged in flood water
for two or three weeks therein and that was also photographed by the
de facto complainant.  When the de facto complainant confronted with
the accused about the situation and the certificate issued by the
Irrigation Department with regard to full tank level of pedda cheruvu
and consequent refusal by Gram Panchayath of Ameenpur Village, the
accused expressed ignorance, therefore, the de facto complainant got
issued a legal notice dated 18.06.2009 to refund the deposited amount
for which the accused did not reply and with a malafide intention to
defraud the de facto complainant intentionally suppressed the vital
information and induced to enter into the development agreements-
cum-GPA only to extract money from the de facto complainant by
inducing and falsely represented to enter into above agreement.  If the
accused has not suppressed such vital information to the de facto
complainant, the de facto complainant would not pay such heavy
amounts to the accused and in fact would have withdrawn from the
proposed agreement with the petitioner and since received money
from the de facto complainant is refundable deposit that is not
returning, thereby the accused committed the offence of breach of
trust under Section 406 IPC and also committed the offences
punishable under Sections 418 IPC and 420 IPC by cheating and
dishonest inducement to enter into the agreement-cum-GPA to cause
wrongful loss to the de facto complainant.  Hence, to refer the
complaint to police for investigation.
       
3.      In the complaints, there is no witness cited and there is no
document referred or filed and what is the document referred even in
the complaints is the respective agreement-cum-GPA only.

4.      The police after investigation filed the final report in both the
cases saying the witnesses referred in the charge sheet ie.,
P.Venkatesam-de facto complainant as LW.1, Sri Gangadhar Goud,  
Executive Officer at Patacherru as LW.2, Sri T.Srinivasa Rao as LW.3
and Sri J.Satyanarayana, a retired employee as LW.4, stated in the
course of investigation from examination in support of version of the
de facto complainant, thereby to take action as it makes out the
offences under Sections 406, 418 and 420 IPC.  It is the same that was
taken cognizance by the learned Magistrate by allotting C.C.Nos.307
and 308 of 2012 against respective accused Smt.J.Sesha Ratna Kumar  
and Smt.A.Suchitra.
5.      It is the said two calendar case proceedings taken cognizance by
the learned Magistrate sought for quashing by accused respectively
(being referred as petitioners here after for convenience) with
contentions almost common in both the quash petitions respectively
that the petitioners purchased the agricultural lands in Sy.No.198 of
Ameenapur under registered document No.4460 of 1984 and besides  
the petitioners other relatives also purchased agricultural lands in that
survey number out of the total extent of Ac.16.13 gts. from the
original owners and the petitioner in Crl.P.No.2716 of 2013 gifted
Ac.1.00 of land out of love and affection under a registered Gift
Settlement Deed No.6443 of 2002 dated 03.10.2002.  In
Crl.P.No.2715 of 2016 the brother of petitioners husband, by name
Jaladi Rama Koteswara Rao and his elder son Jaladi Ravindranath
were looking after the affairs of the land on behalf of all the owners
and there has been no occasion to deal with either in its development
or otherwise personally and that all the land owners entered into a
Development Agreement with M/s.Panchajanya Real Estates and  
Constructions for making the land into residential plots in accordance
with HUDA Norms and obtained the necessary HUDA approval and  
permission vide No.5/MP2/HUDA/05 dated 11.02.2005 and  
developed the total extent of land admeasuring Ac.16.13 guntas as per
HUDA approved layout.  After the development was completed in all
respects, HUDA released the land mortgaged to them through a
registered document No.118 of 2007 dated 02.08.2007 and sanctioned
the final layout on 17.08.2007.  According to the development
agreement, the respective owners and the developer shared the
residential plots as per agreed terms are (1) J.Ravindranath for Plot
Nos.1 to 12 and 58 to 72, total 27 plots, (2) J.Vimala for Plot Nos.13
to 17, 29 to 33, 112, 113 and 116 to 126, total 23 plots (3) V.Madhuri
for Plot Nos.18 to 28, 96 to 98 and 103 to 105, total 17 plots
(4) I.Sirnivas Rao for Plot Nos.55 to 57, 73 to 75, 87, 88, 90 to 92 and
109 to 111, total 14 plots (5) J.Sesharatna Kumar (petitioner in
Crl.P.No.2715 of 2013) for Plot Nos.82 to 84, 132, 141, 146, 145 and
153, total 8 plots (6) A.Suchitra (Petitioner in Crl.P.No.2716 of 2013)
for Plot Nos.80, 81, 85, 86, 142, 143 and 154, total plots 7 (7) I.Indira
Rani for Plot Nos.89, 133 to 137, 150 to 152 and 155 to 160, total 15
plots and (8) Panchajanya Real Estates for Plot Nos.34 to 54, 76 to 79,
93 to 95, 99 to 102, 106 to 108, 114, 115, 127 to 131, 138 to 140, 146
to 149 and 161 to 169, total 58 plots respectively for 169 plots total
extent of 45,937 sq. yards and all the land owners including the
petitioners partitioned the extent of 30,819 sq. yards of plotted area
that fell into seven shares under the Registered Partitioned Deed
No.4818 of 2005 dated 25.04.2005, as per which the allotted separate
shares described in Schedule A to G and remaining land went to
the developer towards the developmental charges and while stood
thus, the de facto complainant-P.Venkatesham, being the Managing
Director of M/s.S.V. Shelters Private Limited, approached Sri Jaladi
Rama Koteswara Rao (husbands brother of petitioner in
Crl.P.No.2715 of 2013) and his elder son Ravindranath to construct
duplex houses and after finalization of the terms and conditions,
entered into five development agreements-cum-GPA with the quash
petitioners, J.Vimala, J.Ravindranath and I.Sivarama Krishna
respectively.  As per the terms and conditions, the construction shall
be completed within 24 months after obtaining permission from
HUDA/GHMC/Gram Pancayat and refundable deposit paid by the    
developer was to be refunded by the petitioners and other owners in
phased manner as per clause 16 of the said agreements and as per
clause 39, if the development to make construction and handover the
agreed houses, they shall pay damages of Rs.25,000/- per month for
each proposed house allotted to the agreement holders till possession
is delivered.  There is also an arbitration clause No.42.  The de facto
complainant proposed that if the plots given to the previous developer
and the plots if any sold out to third parties are acquired from them,
they can construct duplex houses as a gated colony and also given
assurance to Ramakoteswara Rao and his son, who were looking after
the affairs throughout, finance for acquiring those plots and it is
reiterated that except for signing the development agreement-cum-
GPA, petitioners never participated in any of the talks or discussions
held with the developer ie., de facto complainant herein and
subsequently, due to the slump in the real estate market, the de facto
complainant being developer in order to withdraw from the
development if possible and to claim refund of advance paid and
started making allegations as if the land is falling in Full Tank level
while the negotiations were continuing between Rama Koteswara Rao
and his son and the de facto complainant issued legal notice dated
18.06.2009 with false allegations and started threatening calls through
phone  to kidnap them and send unsocial elements to their flat and in
fact Rama Koteswara Rao given a complaint against the de facto
complainant herein and Gopalapuram Police Station registered it as
Crime No.379 of 2009 on 17.10.2009.  On 20.10.2009,
J.Ravindranath was kidnapped by some persons at the behest of the de
facto complainant herein and taken him to Kondapur area and forced
to sign some papers and later he was released, for which another
Crime No.625 of 3009 was registered against the de facto complainant
and others in Madhapur Police Station.  The petitioners were informed
that Sri Ravindranath recognized through T.V.Channel that he was
taken to the Sri Bhanu Kiran, an accused in the murder of Suri, when
he was kidnapped, thus it shows the de facto complainant is having
links with unsocial elements and the notices were issued by the de
facto complainant were replied by the petitioners and other owners on
19.10.2009 suitably and the arbitrator Sri V.Veera Raghavan, a
Retired District Judge, was proposed and sought for the objections
and thereafter without communication, filed the false complaints and
the proceedings are liable to be quashed in saying no ingredients to
attract the other contentions.

6.      Heard learned counsel for the quash petitioners and also the
learned counsel for the de facto complainant and perused the material
on record.  The counter to the interim stay application seeking to
vacate stay filed by the 2nd respondent- de facto complainant reiterated
the complaint averments.

7.      From the very report of the de facto complainant, there was
already a development agreement entered into respectively.  The
development agreement was dated 01.07.2008 respectively.  The
private complaint filed in cause referring to police was undisputedly
on 23.06.2011.  It is hardly believable of without knowing about the
land of the landlord and the other aspects, even the de facto
complainant is a land developer and real estate owner from his very
say of 11 years experience entered into the agreements of the land
known as Peddacheruvu area. Even from the agreements and the  
complaints averments, there is nothing to say at the inception of
entering into a development agreement-cum-GPA, there is any
dishonest intention to deceive or to cheat on the part of the respective
two accused persons.  What all stated is the accused-petitioners
expressed no knowledge of inundation of the land during rainy
season.  It is only at instance of de facto complainant through the
panchayat and respective department cause found liable for inundation
and that due to heavy rainpour of that year, noticed nearby constructed
houses in water for two or three weeks.  The fact of the area is with
houses developed also proves there from.  The recourse is providing
drainage facility and raising height of land for construction at best.
Otherwise even it is a writ dispute.  The very complaints speak that as
accused when asked by complainant to refund the advance, did not
refund he says it is cheating and breach of trust.  Every breach of
contract is not breach of trust or cheating.

8.      In this record, the decision of the Apex Court Two-Judges
bench in Uma Shankar Gopalika V. State of Bihar , it is held that a
breach of contract is different from the offence of cheating under
I.P.C and in the absence of the allegation in the complaint that at the
very inception there was intention on behalf of the complainant, no
offence of cheating with criminal conspiracy would be made out in
relation to the facts where the accused entity represented by its
directors financing the truck purchased by the complainant under hire
purchase agreement subsequently the truck not traced and when claim
submitted to the insurance company, the claim was allowed, the
representative of the complainant was allowed to handle the claim,
received the amount and failed to pay therefrom that principal and in
reference to the facts held no offence of cheating made out in
quashing the F.I.R from non-disclosure of the offence not only against
the accused impugning the F.I.R but also against the other non-
disclosure also.      
9.      Thus, from the above in the absence of showing from the
allegations in the complaint that the accused from the very inception
got the intention to deceive, no offence either under Section 418 or
420 IPC that attracts.

10.     The other decision placed reliance is three Judge bench in State
of West Bengal V. Swapan Kumar Guha , where Prize Chits and  
Money Circulations Act, 1978, application under Section 2(c) read
with 3 and 4 involved or not was in question, the Apex Court
observed, the transaction under which one party deposits with the
other or lends to that other a some of money or promise of being paid
interest at a rate higher, agreed rate cannot without more be a money
circulation scheme under Section 2(c) of the Act to attract the penal
consequences.

11.     The another Three Judges bench expression in Anil Mahajan
V. Bhor Industries Ltd , where it is observed that in a contract for
sale for supply of goods to allege the offence of cheating under
Section 415 punishable under Section 418 or 420 I.P.C, it must be
shown from the very beginning of the transaction, there exists
fraudulent and dishonest intention and mere failure to keep a promise
at a subsequent stage does not tantamount to cheating. A cheating is
different from mere breach of contract and mere use of the words of
cheating in the complaint would not be sufficient in the absence of
such a substance from the complaint. On facts held a perusal of the
substance shows a civil case of breach of contract and not a criminal
case of cheating for supply of steel grip tapes on 50% advance
payments against monthly quantity to pay the balance on receipt of
goods for the breach subsequently committed pursuant to the M.O.U,
in saying remedy of damages under Section 73 to 75 of Contract Act
and the learned Magistrate held erred in issuing process under Section
204 of Cr.P.C. For the conclusion referred the earlier expression of the
Apex Court in Alpic Finance Ltd. V. Sadasivan , where on facts, it
is alleged the accused was continuing payment of the instalments in
default and the bank has dishonoured the cheques issued by him and
the further allegation is on physical verification of certain chairs were
supplied were found missing from premises of accused, for that
alleged as committed the offence of cheating and misappropriation,
the Apex Court observed the appellant has no case that the respondent
obtained the article by any fraudulent inducement or willful
misrepresentation and default in payment of instalments not an
offence of cheating or misappropriation, but misappropriation of the
chairs supplied which were already sold in fact but a civil dispute.

12.     The other decision placed reliance is Ford India Ltd V.
Sunbeam Ancillary P. Ltd  where it is observed in controversial
allegations made in F.I.R when did not disclose any offence, the F.I.R
can be quashed by referring to State of Haryana V. Bajanlal  and
Pepsi Foods Limited V. Special Judicial Magistrate , Anil
Mahajan supra and Umashankar Gopalika and another expression  
in Hotline Telegubes and Components V. State of Bihar , Ashok
Sachdev V. G.S.Chauhan  in quashing the F.I.R for the offence
under Section 420 I.P.C which is outcome of private complaint
referred to police by the learned Magistrate for investigation referring
to Maksud sayeed V. State of Gujarat , it is observed the
Magistrate did not apply his judicial mind in simply referring
directing to register the crime, thereby held liable to be quashed. It
was observed the essential ingredients of cheating that there must be
misrepresentation and on that basis complainants acts and suffered
wrongful loss or it cause wrongful gain to accused and in the absence
of which if one acts on credibility of a firm and there is no
misrepresentation in its acting in purchase of the car there is no
offence of cheating held made out. In Girish Sarwate V. State of
A.P. , the full bench on reference, approved the expression in
Gudavalli Murali Krishna V. Gudavalli Madhavi  of a single
Judge differing to the earlier expressions holding not good law by
mainly placing reliance upon Bhajanlal supra though while saying
inherent power is to be exercised sparingly with care and
circumspection.

13.     In support of the said version, the accused persons placed
reliance upon Inder Mohan Goswami V. State of Uttaranchal
where it is observed that the inherent powers of the High Court under
Section 482 Cr.P.C are though wide that has to be exercised sparingly
with great caution and to exercise ex-debito justitia that is to do real
and substantial justice for the administration of which the Courts
exist, and for not to allow to use the prosecution is an instrument of
harassment or private vendetta or with a motive to pressurize the
accused to terms and the powers too could not be exercised to stifle a
legitimate prosecution and Court should refrain from giving prima
facie decision in a case where entire facts are incomplete and hazy,
more so, when the evidence has not been collected and produced
before the Court and the issue involved are of such a magnitude that
they cannot be seen in the true perspective without sufficient material,
though no hard and fast rule can be laid down for exercise of the
extraordinary jurisdiction. It is observed that Court should balance
with personal liberty, the societical interest and a warrant for arrest of
accused should not be issued without proper scrutiny of facts from
complaint or F.I.R in application of judicial mind and where dispute is
a pure civil in nature or from reading of F.I.R the ingredients of
offence are absent, the proceedings can be quashed.

14.     There on facts in relation to contract for sale and the respondent
No.3, the prospective vendee of the sale agreement-cum-General
Power of Attorney failed to pay balance amount despite requests of
the appellants of the society and the respondents allegedly misusing
the same for further sale of the property in question for the alleged
prosecution maintained held, the offences alleged under Section 420
and 467 not made out. It was observed in paras 41 and 42 of the
Judgment that intention is the gist of the offence of cheating defined
under Section 415 I.P.C and to held a person guilty of cheating, it is
necessary to show he had a fraudulent or dishonest intention at the
time of making the promise and mere fact that primary could not keep
his promise cannot be presumed that he all along had culpable
intention to brake the promise from the beginning.

15.     Thus, from the above, when the very complaint averments show
nothing of cheating or deception, but for if at all there is any non
disclosure without knowledge for not even directly dealt with, but
through relatives and others and when there is no deception or
suppression of fact inducing to enter into the agreement mere breach
of contract itself is not sufficient to attract the offence of cheating and
any refundable advance even asked not refunded, there is no
entrustment and breach of trust to attract, thereby from the very
complaint averments that were not properly investigated by the police,
but for simply filed the final report based on the complaint averments
for that the learned Magistrate has taken cognizance even which is not
by proper verification, thereby no offence is made out against the
petitioners, but for it is purely a civil dispute.  In this regard, it is also
necessary to refer the decision of the Apex Court in Rishipal v. State
of Uttar Pradesh , wherein it is held that mere dereliction of duty
does not attract any penal consequences and continuation of criminal
proceedings is a pure abuse of process of law and deserved to be
quashed the proceedings.  The Apex Court in another expression of
V.P.Shrivastava v. Indian Explosives Limited and others  held in
relation to the offence of cheating and criminal breach of trust that to
hold a person guilty of cheating, it must be necessary to show with
averments that at the time of making promise, the accused had
fraudulent or dishonest intention to deceive or to induce person so
deceived to do something which he would not otherwise do and in the
absence of such culpable intention right at the time of entering into
agreement that cannot be presumed merely from failure to keep the
promise subsequently and in the absence of specific averment in the
report or complaint, the presumption is unsustainable and thereby the
proceedings for cheating and criminal breach of trust alleged no way
sustain and liable to be quashed.
16.     Having regard to the above, both the criminal petitions are
allowed and all the proceedings relating to C.C.Nos.307 and 308 of
2012 on the files of the Additional Judicial First Class Magistrate,
Sangareddy, are quashed.  The bail bonds of the petitioners in both the
criminal petitions, if any, shall stand cancelled.

17.     Miscellaneous petitions pending, if any, shall stand closed.

____________________________    
Dr. B. SIVA SANKARA RAO, J  
Dt: 28.01.2016.

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