Lohidasan vs The Inspector of Police, CCIW, CID, Coimbatore City unit

S. Tamilvanan, J.—This Criminal Revision Case has been preferred against the Judgment of Conviction dated 28.12.2004 made in C.A.

No. 89 of 2004 on the file of the Additional Sessions Court - cum - Fast Tract Court No. 1, Coimbatore, whereby modified the judgment dated

10.02.2004 passed in C.C. No. 11 of 1999 on the file of the Judicial Magistrate No. IV, Coimbatore.

The brief facts of the case are as follows:

There were 26 accused in the case in C.C. No. 11 of 1999 on the file of the Judicial Magistrate No. 4, Coimbatore and charges were framed

against all the said accused under Sections 120B, 420 and 409 r/w. 109 IPC. In support of the prosecution case, PWs.1 to 3 were examined.

Exs. P. 1 to P. 36 were marked, apart from M.Os. 1 and 2 before the trial court. Considering the oral and documentary evidence, the trial court

had convicted the petitioner and other accused u/s 420 IPC and acquitted them so far as the offence relating to Sections 120B and 409 r/w. 109

IPC. Aggrieved by which, the appeal was preferred by the accused, wherein the learned Additional Sessions Judge (Fast Tract Court No. I),

Coimbatore, convicted only the revision petitioner/A1 and acquitted all the other accused. Aggrieved by which, the revision petitioner/A1 has

preferred this criminal revision.

Mr. S. Duraisamy, learned Counsel appearing for the revision petitioner would contend that as per the case of the prosecution, during the period

between 29.9.1992 and 7.9.1994, there was a conspiracy between accused A1 to A26 and thereby they caused loss to the Goodalur Primary

Agricultural Cooperative Bank by dishonestly indulging the Bank, so as to sanction jewel loan to A2 to A26, to a total sum of Rs. 3,00,500/-. It is

not in dispute that the revision petitioner/A1 was the Appraiser of the Bank. As per the prosecution case, he certified the spurious jewels as

genuine gold ornaments and thereby dishonestly helped the co-accused who were the beneficiaries. It is not in dispute that subsequently the entire

loan amount was repaid by the co-accused.

According to the learned Counsel for the revision petitioner/A1, the allegations against the petitioner is that he had dishonestly issued certificates

for the spurious jewels (imitation jewels) stating to be gold jewels, so as to help the co-accused and deceived the Bank. But, as per the findings of

the court below, no case has been made out against the other accused so as to punish them u/s 420 IPC or any other provision of law. In such

circumstances, according to the learned Counsel for the petitioner, there could be no offence made out u/s 420 IPC, as against the revision

petitioner/A1.

Per contra, Mr. S. Saravanan, learned Government Advocate on the criminal side contended that though the co-accused were acquitted for the

offence u/s 420 IPC, the alleged offence could be made out as against the revision petitioner/A1 as he was the Appraiser of the Bank who issued

the certificates for the sanction of jewel loans. As per Section 420 IPC as held by the Supreme Court in the decision, S.W. Palanitkar v. State of

Bihar reported in 2002 SCC (Crl) 129, the following ingredients are required to constitute an offence of cheating u/s 420 IPC. They 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.

In the instant case, the revision petitioner/A1 was the appraiser of the Bank to test the genuineness of the gold jewels and issue certificate in

respect of the gold ornaments being pledged in the Bank. As per the prosecution case, the revision petitioner/A1 had issued the aforesaid

certificates to A2 to A26, members of the Bank. As contended by the learned Counsel for the revision petitioner, if the prosecution case is

accepted, it has to be construed that the revision petitioner and the other accused had colluded themselves dishonestly to deceive the Bank and

obtained jewel loans by pledging imitation gold ornaments. However, the court below has held that the alleged guilt against the co-accused A.2 to

A.26 has not been proved beyond reasonable doubts and acquitted them. In such circumstance, according to the learned Counsel for the

petitioner, the conviction and sentence imposed against the revision petitioner u/s 420 IPC could not be legally sustainable.

As contended by the learned Counsel for the revision petitioner, it is clear that if the prosecution case has to be accepted, there should be

conspiracy between the revision petitioner and the co-accused A2 to A26 being the beneficiaries of the jewel loans. Since the co-accused 2 to 26

were acquitted under Sections 120B, 490, 409 r/w. 109 IPC by the trial court and the appellate court, it cannot be said that the revision petitioner

being the Appraiser had fraudulently or dishonestly deceived the Bank so as to make out the case against the petitioner, u/s 420 IPC. It is not in

dispute that to convict a person u/s 420 IPC, the prosecution has to establish cheating and dishonestly inducing delivery of property.

The Hon''ble Supreme Court of India has held in the decision Ram Narain Poply, Pramod Kumar Manocha, Vinayak Narayan Deosthali and

Harshad S. Mehta Vs. Central Bureau of Investigation and Others, , that the offence of cheating is made of two ingredients : deception of any

person and fraudulently or dishonestly inducing that person to deliver any property to any person or to consent that any person shall retain any

property. To put it differently, the ingredients of the offence are that the person deceived delivers to someone a valuable security or property, that

the person so deceived was induced to do so, that such person acted on such inducement in consequence of his having been deceived by the

accused and that the accused acted fraudulently or dishonestly when so inducing the person. To constitute the offence of cheating, it is not

necessary that the deception should be by express words, but it may be by conduct or implied in the nature of the transaction itself.

As per the ruling of the Hon''ble Supreme Court in the decision, Hira Lal Hari Lal Bhagwati Vs. C.B.I., New Delhi, , for the applicability of

Section 420, the existence of fraudulent or dishonest intention at the time of making promise or representation would be necessary. The gross

negligence, even if proved cannot be criminal intent to convict u/s 420 IPC.

One of the essential ingredients of Section 420 IPC is dishonest inducement. ""Dishonestly"" has been defined in Section 24 IPC to mean

deliberate intention to cause wrongful gain or wrongful loss; and when with such intention, deception is practiced and delivery of property is

induced, then the offence u/s 420 can be said to have been committed, as per the decision of the Hon''ble Apex Court rendered in Dr. Sharma''s

Nursing Home v. Delhi Admn reported in 1998 (8) SCC 745.

In the decision Alpic Finance Ltd. Vs. P. Sadasivan and Another, , it has been held by the Hon''ble Apex Court that while entering into a

contract, if a man received some pecuniary advantage and then fails to discharge his part of the contract or to repay the loan, such facts alone

would not constitute the offence of cheating. Fraudulent inducement or willful misrepresentation also have to be established.

Originally, as contended by the learned Counsel for the revision petitioner, the petitioner herein was charged for the offence u/s 420 r/w

120(B) IPC. As per the prosecution case, A2 to A26 had conspired with A1 and other officials of the Goodalur Primary Agricultural Bank had

pledged spurious jewels, as if they were genuine gold ornaments and obtained loans between the period 29.09.1992 and 07.09.1999.

Before the trial court, the revision petitioner/A1 and co-accused A2 to A26 were prosecuted. Though the trial court had held that the alleged

offence u/s 420 was made out against each of the accused, on appeal, the learned Additional Sessions Judge/FTC I, Coimbatore has held that the

charges as against the co-accused A2 to A26 have not been established by the prosecution and accordingly, they were all acquitted by the said

court.

As contended by the learned Counsel for the revision petitioner, the jewel loans were admittedly obtained by the co-accused 2 to 26. As per

the prosecution case, the aforesaid accused, being the members of the co-operative bank, obtained the loan by producing spurious jewels, as if

they were genuine gold ornaments, for which, the revision petitioner/A1 had issued certificates. It is seen that there is no evidence available on

record to show that spurious jewels were received and appraised by the revision petitioner.

Before the trial court, P.W. 1 to P.W. 3 were examined. P.W. 1, Vellayangiri was the Deputy Registrar of Co-operative societies. P.W. 2,

Sivaraj is said to be the Sub-Registrar of Co-operative Societies. P.W. 3, Ramasamy was the Inspector, CCIW, CID, Coimbatore city unit.

Therefore, as contended by the learned Counsel for the revision petitioner, there is no evidence available on record to show that the petitioner

herein had certified spurious jewels for the purpose of granting loan, so as to attract Section 420 IPC. It is not in dispute that totally a sum of Rs.

3,00,500/- was obtained, by way of producing spurious jewels by the aforesaid co-accused and that the amount was repaid to the Co-operative

Bank.

As per Section 420 IPC, to convict the revision petitioner/A1, the prosecution has to establish that the petitioner herein has caused Cheating

and dishonestly inducing delivery of property. As per the decision of the Hon''ble Apex Court, rendered in Tulsi Ram Vs. State of U.P., , for a

person to be convicted u/s 420 IPC, it has to be established not only that he has cheated some one, but also that by doing so, he is dishonestly

induced the person, cheated to deliver any property etc. Thus, the two essential ingredients are 1. deceit, that is to say, dishonest or fraudulent

misrepresentation, and 2. inducing the person so deceived to part with property.

In the instance case, it is seen that A2 to A26, said to have obtained loan from the Co-operative Bank, by producing spurious jewels were not

found guilty, as per the verdict of the court below. Against the same, no appeal or revision has been preferred by the respondent or the Agricultural

Co-operative Bank. In such circumstances, as contended by the learned Counsel for the revision petitioner, it cannot be construed that the

petitioner herein has committed offence, so as to attract Section 420 IPC, since the aforesaid ingredients required for convicting the accused has

not been established by way of legal acceptable evidence.

In a criminal revision, unless there is manifest error of law or perverse finding, this Court cannot interfere with the same. The findings of the

court below could be construed as perverse, when the same is against the evidence or not supported by evidence. Here in this case, there is no

acceptable evidence to show that spurious jewels were received and appraised by the petitioner and committed cheating and dishonestly inducting

delivery of property, so as to attract Section 420 IPC. Therefore, I am of the considered view that the conviction and sentence imposed on the

revision petitioner herein is not sustainable in law, as the finding of the courts below is not supported by evidence. Hence, to meet the ends of

justice, I am of the view that the criminal revision has to be allowed.

In the result, the criminal revision is allowed and the conviction and sentence, imposed by the courts below are set aside. The fine amount, if

any paid by the revision petitioner is ordered to be refunded to him forthwith.