Ravi Vaswani vs State Of Jharkhand

Anil Kumar Choudhary, J

Heard the parties.

Though notice has validly been served upon the opposite party no.2, no one turns up on behalf of the opposite party no.2 in-spite of repeated calls.

This criminal miscellaneous petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with the prayer to quash the entire criminal proceeding of C.P. Case No. 248 of 2022, including the order dated 06.07.2023 by which the learned Judicial Magistrate -1st Class, Dhanbad has taken cognizance of the offence punishable under Section 406/420 of the Indian Penal Code.

The allegation against the petitioners is that the petitioner nos. 1 & 2 being the partners of Kwality Foundry Industries purchased coal from the complainant-company. The petitioners used to purchase coal from the complainant -company for a considerable period of time and used to make payments in round figures and thus an amount of Rs.11,92,555/- became due and payable, over a period of time, which he did not pay. Basing upon the complaint, statement of the complainant on solemn affirmation and statement of the inquiry witnesses, the learned Magistrate has found prima facie case for the offences punishable under Section 406/420 of the Indian Penal Code and passed summoning orders against the petitioners.

The learned counsel for the petitioners submits that charge has not yet been framed before the trial court. It is then submitted by the learned counsel for the petitioner that the allegations against the petitioners are false and even if the entire allegations made against the petitioners are considered to be true in their entirety, still neither the offence punishable under Section 406 nor the offence punishable under Section 420 of the Indian Penal Code is made out against the petitioners. Hence, it is submitted that the prayer as prayed for by the petitioners in this criminal miscellaneous petition be allowed.

The learned Addl. P.P. on the other hand vehemently opposes the prayer as prayed for by the petitioners in this criminal miscellaneous petition and submits that the materials in the record are sufficient to constitute both the offences punishable under Section 406 and 420 of the Indian Penal Code. Hence, it is submitted that this criminal miscellaneous petitioner being without any merit be dismissed.

Having heard the submissions made at the Bar and after going through the materials available in the record, it is pertinent to mention here that it is a settled principle of law as has been held by the Hon’ble Supreme Court of India Vir Prakash Sharma vs. Anil Kumar Agarwal & Another reported in (2007) 7 SCC 373, para-8 of which reads as under: -

“8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus:

“405. Criminal breach of trust.—Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits ‘criminal breach of trust’.” Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made.” (Emphasis supplied)

Wherein it has been held by the Hon’ble Supreme Court of India that where the dispute between the parties is essentially a civil dispute, non-payment or under-payment of the price of the goods by itself does not amount to commission of the offence of cheating or criminal breach of trust.

It is also a settled principle of law as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Anr. reported in (2005) 10 SCC 336, paragraph no. 6 of which reads as under :-

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It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied)

that every breach of contract would not give rise to an offence of cheating and only in those cases, the breach of contract would amount to cheating where there was any deception played at the very inception and in the intention to cheat has developed later on, the same cannot amount to cheating.

Now coming to the facts of the case, there is no allegation against the petitioners of playing deception since the beginning of the transaction between the parties rather it is admitted case of the complainant that the transaction between the parties was going on for a considerable period of time.

Under such circumstances, this Court is of the considered view that even if the entire allegations made against the petitioners are considered to be true in their entirety, still the offence punishable under Section 420 of the Indian Penal Code is not made out against the petitioners.

So far as the offence punishable under Section 406 of the Indian Penal Code is concerned, there is no allegation against the petitioners of dishonest misappropriation of any entrusted property which is a sine-qua-non to constitute the offence punishable under Section 406 of the Indian Penal Code rather it is a case of underpayment of price of the coal purchased which in view of the settled principle of law in the case of Vir Prakash Sharma vs. Anil Kumar Agarwal & Another (supra) being in respect of a civil dispute, will not constitute the offence punishable under Section 406 of the Indian Penal Code.

In view of the discussions made above, since neither the offence punishable under Section 406 of the Indian Penal Code nor the offence punishable under Section 420 of the Indian Penal Code is made out against the petitioners, even if the entire allegations made against the petitioners are considered to be true in their entirety, therefore, continuation of this criminal proceeding against the petitioners will amount to abuse of process of law. Hence, this is a fit case where the entire criminal proceeding of C.P. Case No. 248 of 2022, including the order dated 06.07.2023 by which the learned Judicial Magistrate  -1st  Class, Dhanbad has taken cognizance of the offence punishable under Section 406/420 of the Indian Penal Code, be quashed and set aside qua the petitioners.

Accordingly, the entire criminal proceeding of C.P. Case No. 248 of 2022, including the order dated 06.07.2023 by which the learned Judicial Magistrate -1st Class, Dhanbad has taken cognizance of the offence punishable under Section 406/420 of the Indian Penal Code, is quashed and set aside qua the petitioners.

In the result, this criminal miscellaneous petition is allowed.