IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN MONDAY, THE 15TH FEBRUARY 2010 / 26TH MAGHA 1931 Crl.MC.No. 2445 of 2009() -------------------------------------- (CR.NO.114/09 OF KANNUR TOWN POLICE STATION) PETITIONER(S): ACCUSED NO.1. -------------------------------------------------- ASHRAF P.M., S/O. ABDUL RAHIMAN, NAFEESA BEEVI MANZIL, MILL ROAD, POST VALAPATTANAM, KANNUR DIST. BY ADV. MR.SUNIL NAIR PALAKKAT RESPONDENT(S): STATE & DEFACTO COMPLAINANT: -------------------------------------------------------------------------------- 1. THE STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR OF THE HIGH COURT OF KERALA, ERNAKULAM. 2. THE DEPUTY SUPERINTENDENT OF POLICE, KANNUR DIVISION, KANNUR (DT). 3. KALANTHARAKATH HAROON, S/O. MOOSAKUNHI, KANJIRODE AMSOM, THALAMUNDA DESOM, KANNUR TALUK, KANNUR. R1 & R2 BY PUBLIC PROSECUTOR MR.C.M. KAMAPPU R3 BY ADVS. MR.M.RAMESH CHANDER, MR.ANEESH JOSEPH. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 05/02/2010, THE COURT ON 15/02/2010 PASSED THE FOLLOWING: Kss P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - Crl.M.C. No. 2445 of 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 15th day of February, 2010. ORDER This is a petition filed under Section 482 of the Code of Criminal Procedure seeking to have Annexure A3 quashed as far as the petitioner is concerned. 2. The petitioner is the first accused in Crime No. 114 of 2009 of Kannur Town Police Station for having committed offences punishable under Section 420 of the Indian Penal Code. 3. The proceedings originated on a private complaint. According to the complainant, who is the third respondent herein, the petitioner had entered into an agreement with one Abdul Rahimman evidenced by Annexure A1. It is claimed that the petitioner had paid a sum of Rs.10,00,000/- as advance. The sale deed was to be executed within four months from the date of Crl.M.C.2445/2009. 2 Annexure A1. The sale deed infact had to be executed by one Abdul Rahiman in favour of one of the petitioner's nominee. 4. It is seen that the third respondent herein decided to purchase the property and he approached the petitioner. An agreement was entered into between them and that is Annexure A2. The price of the land was fixed as Rs.2,29,000/- per cent. It is claimed that part consideration of Rs.20,00,000/- was paid. Petitioner was to execute the sale deed in favour of the third respondent on or before 13.5.2008. 5. In the complaint, the third respondent claimed that he had paid Rs.20 Lakhs to the petitioner. According to the complainant, after having received the sum of Rs.20 Lakhs, he was informed by the petitioner that the property did not exclusively belong to Abdul Rahiman, but others had also rights over the same. He also claimed to have stated to the complainant that the petitioner had not given Rs.10 Lakhs to Abdul Rahiman. As per the complaint, the Crl.M.C.2445/2009. 3 grievance is that the complainant came to understand that without honouring the contract with him, Abdul Rahiman and the petitioner are trying to dispose off the property to somebody else. He pleads that they are going to cheat him. 6. Learned counsel appearing for the petitioner pointed out that there is absolutely nothing in the complaint to show that there is any element of cheating. At best, it can be a breach of contract, for which the remedy is of civil nature. Learned counsel pointed out that the complaint is based on an agreement for sale and if the complainant had any case that there is breach of contract for sale, his remedy is to approach the civil court. Even in the complaint, there is no averment to the effect that at the time of entering into the agreement between the petitioner and the third respondent herein, the petitioner had any intention to cheat the third respondent, who is the complainant. Again, according to the learned counsel, all that the complaint says is that the complainant understands that the property is Crl.M.C.2445/2009. 4 going to be sold to somebody else. These averments in the complaint are, according to learned counsel for the petitioner, not sufficient to attract Section 420 IPC. 7. Learned counsel appearing for the contesting respondent pointed out that it is very clear from a reading of the complaint that the complainant had been taken for a ride. Even at the time of entering into the contract with the complainant, according to learned counsel, the petitioner had an intention to cheat the complainant. It is also pointed out that on coming to know about the same, the complainant filed O.S. 127 of 2009 before the Sub Court, Thalassery and tried to attach the property of the petitioner. There, the petitioner filed a counter affidavit pointing out that the property had already been sold. It is also pointed out that the petitioner had approached this court as per W.P. (C) 7636 of 2009 complaining about police harassment and was able to get an interim order dated 16.3.2009. The interim order is produced as Annexure R3(c). The case was posted to 2.4.2009. It is pointed out that it was subsequent Crl.M.C.2445/2009. 5 to that the sale deed was executed by the petitioner regarding his property in favour of a stranger. The writ petition was then withdrawn. This will clearly show the state of mind of the petitioner and he had intention to deceive. 8. At first, it may be noticed that the private complaint moved before the Magistrate court concerned was referred for investigation under Section 156(3) of Cr.P.C. and the crime was registered for an offence punishable under Section 420 IPC. 9. As rightly pointed out by the learned counsel for the petitioner, a reading of the complaint does not indicate that at the time of entering into the agreement between the petitioner and the third respondent, there was any intention on the part of the petitioner to cheat the third respondent. What the complainant says is that long after the agreement for sale, the complainant was given to understand that the property was not solely owned by Abdul Crl.M.C.2445/2009. 6 Rahiman and there were other sharers also. That was against the assertion made by the petitioner, so says the third respondent. 10. For a moment, it is difficult to accept the above claim. At the time of entering into the agreement, obviously one would verify the title deed. Had the title deed been perused, it could have been easily seen that there were other persons also, who have title in the property involved in the agreement. If as a matter of fact, the third respondent did not choose to verify the title deed, he had only to thank himself. In fact a reading of Annexure A2 would clearly show that all that had been stated by the petitioner was that he would obtain the property from Abdul Rahiman, and it would be conveyed to the complainant. The question as to whether any right as such is conferred on the complainant by Annexure A2 is a matter that need not be considered in this proceedings. Crl.M.C.2445/2009. 7 11. The complainant would claim that he had paid a sum of Rs.20 Lakhs. There is no averment in the complaint that the property has been assigned by Abdul Rahiman in the name of the petitioner and thereafter he had declined to assign it to the complainant. All that the complaint says is that the complainant reliably understands that the property is to be assigned to a third person. That is totally insufficient to attract offence under Section 420 IPC. 12. In this connection one may refer to the decision reported in Anil Mahajan v. Bhor Industries Ltd. ((2005) 10 SCC 228), wherein it was held as follows: “From mere failure of a person to keep up promise subsequently, a culpable intention right at the beginning, that is, when he made the promises cannot be presumed. A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, Crl.M.C.2445/2009. 8 dishonest intention is shown at the beginning of the transaction. The substance of the complaint is to be seen. Mere use of the expression “cheating” in the complain is of no consequence.” In the decision reported in Jose V.Y. v. State of Gujarat (2009(1) KLD 280 (SC)), the ingredients necessary to attract the provision have been stated. It reads as follows: “Section 415 of the Indian Penal Code defines cheating as under: “Section 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'” Crl.M.C.2445/2009. 9 An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied: (i)deception of a person either by making a false or misleading representation or by other action or omission; (ii) fraudulently or dishonestly inducing any person to deliver any property; or (iii) To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit” For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out.” Crl.M.C.2445/2009. 10 13. Learned counsel appearing for the contesting respondent had highlighted the act of the petitioner in assigning his property after obtaining orders from this court. It is difficult to understand how that could have any bearing on the issue involved in this case. May be that the petitioner had assigned his property to escape from being proceeded against his property in case the complainant obtains a decree in his favour in the suit filed by him. But the sale was not with reference to that property, which was the subject matter of the agreement between the petitioner and the third respondent. Even assuming that there was a malafide intention on the part of the petitioner in assigning his property, that does not lead to the conclusion that the petitioner had any intention to cheat the complainant at the time of entering into the agreement. 14. It is well settled that the fraudulent intention to cheat or deceive should exist at the beginning itself and any subsequent conduct which may give rise to such a suspicion is not sufficient to attract Section 420 IPC. Crl.M.C.2445/2009. 11 15. Viewed from this angle, the present complaint cannot be sustained. In the result, this petition is allowed. Annexure A3 complaint and the further proceedings thereon shall stand quashed as against the petitioner. P. BHAVADASAN, JUDGE sb.