Criminal Misc. Case Nos. 247 and 248 of 1990

16th July, 1990.

Petitioner Counsel: K. M. Sahu, for
Respondent Counsel: J. Patnaik, .

Cases Cited:
(1989) 67 Cut LT 719 [Para 8]
(1983) 55 Cut LT 24 [Para 7]
(1978) 46 Cut LT 560,1978 Cut WR (Cri) 431 [Para 6]
(1970) 1 Cut WR 59 [Para 6]
1966 Cri LJ 1489,AIR 1966 SC 1773 [Para 6]

JUDGMENT

ORDER : -In these two applications filed u/S.482, Cr. P.C. (for short 'Cr. P.C.') the parties are the same and the facts and circumstances are similar and identical question of law is raised. As such, with the consent of the learned counsel for the parties the cases were heard together and they are disposed of by this common judgment. While Criminal Misc. Case No. 247 of 1990 relates to I.C.C. Case No. 7 of 1989 of the Court of the Sub-divisional Judl. Magistrate (S.D.J.M.) Bhubaneswar, Criminal Misc. Case No. 248 of 1990 relates to I.C.C. Case No. 6 of 1989 of the same court.

2. In these applications challenge is raised to the orders passed by the learned S.D.J.M. taking cognizance of the offence u/S.420, I.P.C. (for short ' I.P.C.') against the petitioner. The petitions of complaint filed by the opposite party before the learned S.D.J.M. were registered as I.C.C. Case Nos.6 and 7 of 1989. Since the facts in both the eases are similar for the sake of brevity the facts in I.C.C. Case No. 7 of 1989 may be referred to. The gist of the allegations made therein was that the complainant was working under M/s. Konark Television Limited, a Government of Orissa Enterprise engaged in manufacture of television sets having its Head Office and Factory at Industrial Estate, Bhubaneswar. The company was marketing its products by appointing dealers throughout India. The petitioner (accused) is one of the partners of M/s. Glory Watch and Electronics having its office at 1, Chowaranghee place, Calcutta 13. The accused was lifting television sets from the complainant-Company on payment of cash as well as cheques at different points of time. In the months of April and June, 1987, the accused placed orders for supply of different varieties of television sets and accordingly the complainant supplied television sets to him. As the accused had been dealing with the complainant's company since long, the complainant supplied the goods on credit and requested the accused to make cash payment. But the accused induced the complainant to receive payment by cheque and impressed the complainant and his company that he had got sufficient cash in his account and issued cheques bearing Nos. 168034 dated 10-4-1987 for Rs. 25,700/- and No.478993 dated 5-6-1987 for Rs. 16,500/- drawn on the Bank of Maharashtra at Calcutta. But when the complainant's company deposited those cheques, they were dishonoured with the endorsement "refer to drawer" by the Bank of Maharashtra as there was no fund in the account of the accused. Though the company intimated the accused about this fact, he did not make arrangements to clear the dues. It is further stated in the complaint petition that the accused, knowing fully well that he had no funds in his account at the time of issuing the cheques, issued the cheques with the intention of cheating the complainant and his company. On receipt of the complaint petition the learned Magistrate recorded the statement of the complainant on 11-1-89, took cognizance of the offence u/S. 420, IPC holding that a prima facie case is made out to proceed with the trial of the accused under the said section and directed issue of summons against him.

3. The petitioner appeared in the case on 24-2-89 and raised the question of maintainability of the case against him. After hearing the counsel appearing for the parties, the learned Magistrate by order dated 6-2-90 rejected the petition filed by the petitioner challenging the maintainability of the case. Therefore, the petitioner approached this Court with the present applications.

4. The main thrust of the argument of Sri M. M. Sahu, appearing for the petitioner, is that, accepting the averments made in the complaint petition and the statement of the complainant on their face value, the offence u/ S. 420, IPC is not made out. It is his submission that the essence of the allegation of the complainant is that the accused prevailed upon the complainant to accept two cheques in question holding out to him that there was sufficient fund in his (accused's) account in the Bank though he knew that sufficient fund was not available then in his account and the cheques were naturally dishonoured. These allegations may attract civil liability for damages for breach of contract, but do not satisfy the ingredients of the offence u/ S.420, IPC.

5. Sri. J. Patnaik appearing for the opposite party (complainant) contended on the other hand that on allegations in the complaint petition the learned Magistrate was right in taking cognizance u/S. 420, IPC and issuing process against the petitioner.

6. In the case of G. Anji v. Sunanda Kar, reported in (1978) 46 Cut LT 560, A Division Bench of this Court held that mere proof of the fact that the cheque was dishonoured, would not help in establishing the offence of cheating unless the relevant ingredients are established. Referring to the case of Gobardhan Panda v. State, reported in (1970)

1 Cut WR 59 this Court observed that the following ingredients are necessary to constitute cheating :

"(i) Deception by the accused,

(ii)(a) Fraudulent or discreetly inducing that person.

(i) to deliver any property to any person; or

(ii) to consent that any person shall retain any property; or

(b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage of harm to that person in body, mind, reputation or property."

The court observed that it was necessary for the prosecution to prove that the respondent had deceived the appellant by fraudulently or dishonestly inducing him to deliver the promissory note by accepting the cheque and but for the deception, in consideration of receiving the cheque, the appellant would not have parted with the promissory note and this parting of the promissory note had caused damage or harm to the property of the appellant. "Harm" in S.415, IPC as pointed out by the Supreme Court in the case of Mrs. Veeda Menezes v. Yusuf Khan Haji Ibrahim Khan reported in AIR 1966 SC 1773 : (1966 Cri LJ 1489) means "injury to a person in body, mind, reputation or property." This court further observed that mere drawing up of a cheque for a specified amount even when the drawer knows that he does not have sufficient balance to his credit in his account to cover the amount for which the cheque is issued would not constitute any element for the offences.

7. The distinction between a case of mere breach of contract and the criminal offence of cheating was considered by this Court in the case of M/s Lord Match Industries v. M. S. Selvasekaran, reported in (1983) 55 Cut LT 24, wherein it was observed in para 8 that the distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of the alleged inducement which may be judged by his subsequent act, but of which the subsequent act is not the sole criterion. Mere breach of a contract cannot give rise to a criminal prosecution. Where a charge of cheating rests upon a representation, which is impugned as false and which relates not to an existing fact but to a future event, it has to be shown that the representation was false to the knowledge of the accused at the time when it was made. It is but little to the purpose to show that in fact, the representation has turned out to be untrue.

8. In the case of Ganga Traders and Industries (P) Ltd. v. S. K. Agarwalla, reported in (1989) 67 Cut LT 719 relying on the earlier decisions of this Court and other High Courts this Court held that because of the absence of the necessary intent to deceive at the time of issuance of the cheques and also for non-fulfilment of one of the essential ingredients, namely inducing the deceived party to deliver any property, as well as the other ingredients of S. 415, IPC, it was not possible to sustain the charge u/S. 420, IPC against the petitioner in that case.

9. On analysis the factual position that emerges in the present case is that the petitioner had received T.V. sets from the opposite party on credit since he was an old dealer of the Company. Though the opposite party was demanding payment in cash, the petitioner prevailed upon him to accept the cheques, giving the impression that he had sufficient funds in his account which later proved to be untrue and the cheques bounced. Tested in the light of the principle laid down in the decisions referred to earlier, from these facts it cannot be said that any deception or fraudulent or dishonest inducement was practiced by the petitioner on the basis of which the opposite party delivered T.V. sets to him or that the petitioner intentionally induced the opposite party to do or omit to do anything which he would not have done or omitted to do if he was not so deceived, and such act or omission has caused or was likely to cause damage or harm in body mind, reputation or property. At the most it can be said from the aforementioned facts that the

petitioner made a false promise to the opposite party that he would be able to encash the cheques without difficulty. Even assuming that the petitioner knew that sufficient fund was not available in his Bank account for encashing the cheques he might have intended to deposit money in the Bank before the cheques were presented for encashment. As noticed earlier, the conduct of the petitioner might amount to a breach of contract and may make him liable for damage, but does not attract the criminal offence u/S.420, IPC. The learned Magistrate therefore erred in taking cognizance of the offence u/S.420, IPC against the petitioner. In such circumstances continuing the criminal proceedings will amount abuse of the process of the court. Therefore this is a fit case for interference by this Court u/S. 482, Cr. P.C.

10. In the result, the petitions are allowed. The order taking cognizance and the impugned orders dated 6-2-90 are quashed.

Petition Allowed