Challenge against the order dismissing of FIR quash
2. The present appeal challenges the order dated 15th July 2022 passed by the learned Single Judge of the High Court of Judicature at Madras in Criminal O.P. No. 20716 of 2020 and Crl. M.P. No. 8763 of 2020, whereby the High Court rejected the petition filed by the present appellant under Section 482 of the Code of Criminal Procedure, 1973 (“Cr.P.C.” for short), to call for the records and to quash the First Information Report (“FIR” for short) registered as Crime No. 21 of 2020, on the file of SHO, District Crime Branch, Kancheepuram, in connection with the offence punishable under Section 420 read with 34 of the Indian Penal Code, 1860 (“IPC” for short).
3.1 The case of the prosecution is that, during the year 2016, accused No. 2-Suresh Prathaban, being a college friend, approached the complainant Karthick Krishnamurthy for some help to clear his hand loan. The accused No. 2 further told that he had business with accused No. 1 Lakshmanan, who is running a hotel and also doing real estate business. Upon the insistence of accused No. 2, the complainant had agreed to extend financial help to accused No. 1 to the tune of Rs.1,60,00,000/- for the business project(s) at Oragadam and around Kancheepuram District with condition to repay the same within 20 months with 100% profit.
3.2 Accordingly, the complainant transferred a sum of Rs.49,25,000/- on 18th March 2016, Rs.20,01,000/- on 31st May 2016, Rs.36,25,000/- on 13th June 2016, Rs.30,24,166/- on 8th July 2016 through RTGS and Rs.24,25,834/- in cash to accused Nos. 1 and 2, totalling to the tune of Rs.1,60,01,000/- (though mentioned in complaint as Rs.1,60,00,000/-). To secure the same, accused No. 1 had executed a registered simple mortgage deed dated 18th March 2016 in favour of the complainant relating to 100 plots at Sumangali Village, Thiruvannamalai District, registered vide document No.768 of 2016 for Rs.1,00,00,000/-.
3.5 Apart from all these transactions, on insistence of accused Nos. 1 and 2, the complainant joined in the “gold 4 chit business” conducted by accused No. 1 and paid a sum of Rs.1,20,000/- per month, from March 2016 to August 2017, totalling to the tune of Rs.21,60,000/-. The accused persons swindled all the amounts and cheated the complainant. The accused No. 1 had disposed of about 58 plots on his own and failed to return the mortgaged amount of Rs.1,00,00,000/- with interest. He also cancelled the power of attorney standing in favour of the complainant relating to 9.80 acres of land at Chittoor Village and without notice to the complainant, he sold out the same to third parties. Accordingly, the appellant and other accused persons cheated the complainant to the tune of Rs.16,01,00,000/- (though mentioned in complaint as Rs.16,06,00,000/-) by their willful and intentional action of fraud, cheating and criminal breach of trust. Hence the complaint.
3.6 On the strength of the complaint filed before the Judicial Magistrate, a FIR being Crime No. 21 of 2020 came to be registered on 7th November 2020, at District Crime Branch, Kancheepuram District, against accused Nos. 1, 2 and 3, for the offences punishable under Section 420 read with 34 of the IPC.
3.7 Aggrieved thereby, the appellant herein filed a Criminal O.P. No. 20716 of 2020 before the High Court, under Section 482 of the Cr.P.C., to call for the records and to quash the said FIR.
3.9 The Single Judge held that the FIR discloses prima facie commission of a cognizable offence and as such, the High Court cannot interfere with the investigation. As a result, the High Court rejected the petition under Section 482 of Cr.P.C. for quashing of the FIR, but directed the investigating agency to complete the investigation and file a final report within a period of twelve weeks.
3.10 Aggrieved thereby, the appellant filed the present appeal, in which notice came to be issued vide order dated 21st October 2022.
3.11 As per the additional documents filed in this Court, the charge-sheet in relation to the subject FIR, came to be filed on 4th January 2023.
Consideration
Precedents regarding Section 482
9. The law with regard to exercise of jurisdiction under Section 482 of Cr.P.C. to quash complaints and criminal proceedings has been succinctly summarized by this Court in the case of Indian Oil Corporation v. NEPC India Limited and Others [(2006) 6 SCC 736; 2006 INSC 452] after considering the earlier precedents. It will be apposite to refer to the following observations of this Court in the said case, which read thus:
“Para. 12. 13, 14”
Person who initiates criminal proceedings must aware if there is a remedy lies only in civil law then he is made accountable of misconceived criminal proceedings
10. The Court has also noted the concern with regard to a growing tendency in business circles to convert purely civil disputes into criminal cases. The Court observed that this is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court also recorded that there is an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. The Court, relying on the law laid down by it in the case of G. Sagar Suri and Another v. State of U.P. and Others [(2000) 2 SCC 636 : 2000 INSC 34] held that any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. The Court also observed that though no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law.
section 415 and 420 IPC legal implications
11. This Court, in the case of Prof. R.K. Vijayasarathy and Another v. Sudha Seetharam and Another [(2019) 16 SCC 739 : 2019 INSC 216 ] has culled out the ingredients to constitute the offence under Sections 415 and 420 of IPC, as under:
“15. Section 415 of the Penal Code reads thus:
“415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived 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 or harm to that person in body, mind, reputation or property, is said to “cheat.”
16. The ingredients to constitute an offence of cheating are as follows:
16.1. There should be fraudulent or dishonest inducement of a person by deceiving him:
16.1.1. The person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or
16.1.2. The person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and
16.2. In cases covered by 16.1.2. above, the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property.
17. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating.
18. Section 420 of the Penal Code reads thus:
“420. Cheating and dishonestly inducing delivery of property.— Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”
19. The ingredients to constitute an offence under Section 420 are as follows:
19.1. A person must commit the offence of cheating under Section 415; and
19.2. The person cheated must be dishonestly induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.
20. Cheating is an essential ingredient for an act to constitute an offence under Section 420.”
Previous decisions on that point
12. A similar view has been taken by this Court in the cases of Archana Rana v. State of Uttar Pradesh and Another [(2021) 3 SCC 751 : 2021 INSC 135], Deepak Gaba and Others v. State of Uttar Pradesh and Another [2023) 3 SCC 423 : 2023 INSC 1] and Mariam Fasihuddin and Another v. State by Adugodi Police Station and Another [2024 SCC OnLine SC 58 : 2024 INSC 49].
Ingredients to attract section 420 IPC
13. It could thus be seen that for attracting the provision of Section 420 of IPC, the FIR/complaint must show that the ingredients of Section 415 of IPC are made out and the person cheated must have been dishonestly induced to deliver the property to any person; or to make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. In other words, for attracting the provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses:
(i) the deception of any person;
(ii) fraudulently or dishonestly inducing that person to deliver any property to any person; and
(iii) dishonest intention of the accused at the time of making the inducement.
14. The averments with regard to the present appellant as have been found in the FIR is as under:
“At the instance of the said Lakshmanan (accused No.1), I (complainant) paid directly Rs. 20,00,000/- to one Mohan (appellant-accused No. 3) and the said Lakshmanan (accused No.1) transferred the remaining sale consideration of over 18 odd crores to Mohan for the purchase of his lands at Sunguvarchatram. But suppressed the execution of sale deed dated 03.02.2017 by the appellant/accused No.3.”
FIR or the Charge sheet (final report) even if taken at its face value does not disclose offence under section 420 IPC against the appellant
19. At the cost of repetition, it has to be noted that no role of inducement at all has been attributed to the present appellant. Rather, from the perusal of the FIR and the charge-sheet, it would reveal that there was no transaction of any nature directly between the appellant and the complainant. The version, if accepted at its face value, would reveal that, at the instance of accused No. 1, the complainant transferred the amount of Rs.20,00,000/- in the account of the appellant. On receipt of the said amount, the appellant immediately executed the sale deed in favour of accused No.1, who thereafter executed the GPA in favour of the complainant. After that, no role is attributed to the present appellant and whatever happened thereafter, has happened between accused No. 1, the complainant and the other accused persons. In that view of the matter, we find that the FIR or the charge-sheet, even if taken at its face value, does not disclose the ingredients to attract the provision of Section 420 of IPC qua the appellant.
dishonest inducement is the sine qua non to attract provisions under sections 415 and 420 IPC
20. The dishonest inducement is the sine qua non to attract the provisions of Sections 415 and 420 of IPC. In our considered view, the same is totally lacking qua the present appellant. In that view of the matter, we find that continuation of the criminal proceedings against the present appellant would be nothing else but amount to abuse of process of law resulting in miscarriage of justice.
The contention that since charge sheet has been filed the present appeal is to be dismissed was rejected
21. Insofar as the contention of the respondents that since the charge-sheet has been filed, the present appeal is liable to be dismissed, is concerned, it will be relevant to refer to the following observations of this Court, in the case of Anand Kumar Mohatta and Another v. State (NCT of Delhi), Department of Home and Another [(2019) 11 SCC 706 : 2018 INSC 1060]:
“paras. 14, 15, 16”
22. A similar view has been taken by this Court in the case of Haji Iqbal alias Bala through S.P.O.A. v. State of U.P. and Others [2023 SCC OnLine SC 946 : 2023 INSC 688].
Conclusion
24. In the result, we are inclined to allow the appeal. The order of the High Court dated 15th July 2022 in Criminal O.P. No.20716 of 2020 and Criminal M.P. No. 8763 of 2020 is quashed and set aside. The FIR in Crime No.21 of 2020 and the consequential charge-sheet filed against the present appellant shall stand quashed and set aside.
Party
A.M. MOHAN vs. THE STATE REPRESENTED BY SHO AND ANOTHER – CRIMINAL APPEAL NO. OF 2024 (Arising out of SLP(Criminal) No. 9598 of 2022) – 2024 INSC 233 – MARCH 20, 2024 – 3 judge bench
https://main.sci.gov.in/supremecourt/2022/32027/32027_2022_3_1501_51603_Judgement_20-Mar-2024.pdf
