G.K. Mohanty vs Pratap Kishore Das

B.K. Behera, J.—The petitioner seeks the inherent jurisdiction of this Court u/s 482 of the Code of Criminal Procedure (for short, ''the Code'') to quash a criminal proceeding initiated against him by the opposite party (complainant ) on the basis of a petition of complaint made by the latter. Cognisance has been taken with regard to commission of offences punishable under Sections 420 and 423 of the Indian Penal Code (for short, ''the Penal Code'').

As averred in the petition of complaint and stated by the opposite party before the Chief Judicial Magistrate, Cuttack, the petitioner, having taken two trucks belonging to the opposite party on hire and being liable to pay Rs. 28,000/- (38,000/-?) therefore, issued three cheques for Rs. 20,000/-, Rs. 15,000/-and Rs. 3,000/-for encashment, but the cheques were dishonoured with a note "Stop Payment" in respect of two cheques and with a note "Payment stopped by the Drawer" on another. These acts have constituted commission of the offences by the petitioner, as alleged.

Inherent jurisdiction of the High Court u/s 482 of the Code to quash a criminal proceeding is to be exercised in appropriate case to prevent an abuse of the process of the court or to secure the ends of justice. The criminal proceeding instituted against an accused person shall ordinarily be proceeded with in accordance with law. As held by this Court in ILR (1973) Cuttack 1327, D. Surya Rao v. Liaquat Ali Khan, the allegation must be assumed to be correct until the trial has begun. Where, however, the allegation made in the first information report or in the complaint, even on their face value and if accepted in their entirety, do not constitute an offence or the impugned order clearly brings about a situation which is an abuse of the process of the Court or for the purpose of securing the ends of justice, interference by the High Court is absolutely necessary, the High Court may exercise its power u/s 482 of the Code. Reference has been made to some of the reported cases in Dr. Radhanath Rath and Others Vs. Balakrishna Swain, .

The case is one in which three cheques issued by the petitioner were returned with the endorsements noted above. There is no material that the petitioner had made any endorsement or had issued any instruction to the Bank before issue of the cheques. As would appear from the statement made by the opposite party u/s 200 of the Code, after the cheques were returned, the petitioner neither paid the dues nor deposited the money in the bank for encashment. This would show that the petitioner did not have money in the bank for encashment of the three cheques. Would this amount to cheating punishable u/s 420 of the Penal Code ? With reference to the principles laid down by this Court in Duryodhan Khuntia Vs. Ali Ahmed, , G. Anji v. Sunanda Kar and G. Laxminarayan Naidu Vs. Chitibaina Yerraiah and Another, , the answer would be found in the negative. In order to hold a person guilty of cheating, the intention of the person must be dishonest and there must be mens rea. It has to be shown that his intention was dishonest at the time of making the promise. Dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfil the promise. The distinction between mere breach of a 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 proceeding. In the absence of materials indicating that the accused had any dishonest intention at the time the alleged promise or inducement was made, an offence of cheating cannot be said to have been established.

There is no material to show that at the time of issue of the cheques, the petitioner had made any representation that he had sufficient cash to cover the cheques in his bank account. In his initial statement recorded u/s 200 of the Code, the opposite party had not alleged that any such representation had been made by the petitioner when the cheques were delivered. It had, on the other hand, been stated in the petition of complaint that the cheques were not encashed owing to insufficiency of funds. The possibility of the petitioner having honestly intended of paying in the necessary money before presentation of the cheques could not be excluded. Reliance has been placed on behalf of the opposite party on the view taken by the Delhi High Court in Bhola Nath Arora and Another Vs. The State, . In the instant case, however, there was no allegation that the petitioner had not made any attempt to pay insufficient amount for encashment of the cheques. Issue of a cheque would not imply any representation that the drawer already had money in the bank to cover the amount shown on the cheque, for he may have either authority to overdraw or have an honest intention of paying in the necessary money before presentation of the cheque for encashment.

I thus find that no prima facie case of cheating punishable u/s 420 of the Penal Code has been made out.

I would next come to the case against the petitioner u/s 423 of the Penal Code. This section deals with two specific frauds in the execution of deeds or instruments of transfer, namely, false recital as to consideration and false recital as to the name of the beneficiary. In order to attract Section 423 of the Penal Code, the facts to be proved are : (a) that the accused executed a deed of transfer of any interest in property, (b) that the deed contained false recitals as to the consideration for the transfer, (c) that the deed contained false recital as to the name of the person for whose use or benefit the deed was executed, and (d) that he did so fraudulently. This section relates to any deed or instrument which purports to transfer or subject to any charge any property or any interest therein. Section 423 of the Penal Code has no application to the allegation made in the instant case.

For the foregoing reasons, I am of the view that without proper application of mind with reference to the requirements of Sections 420 and 423 of the Penal Code, cognisance with regard to commission of these two offences has been taken by the learned Chief Judicial Magistrate.

It is necessary in the interests of justice and to prevent an abuse of the process of the court to quash the criminal proceeding against the petitioner.

The Criminal Miscellaneous Case is allowed. The criminal proceeding against the petitioner is quashed.