THE HON’BLE SRI JUSICE N. RAVI SHANKAR CRIMINAL PETITION No.11903 of 2010 ORDER: The point that arises for determination in this petition filed under Section 482 of the Code of Criminal Procedure, 1973 (for short Code), is whether there are sufficient grounds to quash the criminal case C.C.No.86 of 2009 on the file of the II Additional Chief Metropolitan Magistrate, Hyderabad (trial court). 2. Petitioner is the sole accused in the above case and the point arises in the following circumstances. The petitioner has been charge sheeted for the offences punishable under Sections 409 and 420 IPC by the Inspector of Police, Abid Road police station, Hyderabad. Second respondent is the de facto complainant in the said case. 3. The second respondent is stated to be a business man in Hyderabad and he is stated to be a jeweller and also dealing in diamonds. The petitioner is a native of Jaipur in the State of Rajasthan but he has come down to Hyderbad about nearly 10 or 15 years prior to the date of incident. The version of the second respondent is that the petitioner is a precious stones broker and used to supply precious stones to several jewellers in Hyderabad and also buy precious stones from him and other jewellers and that is how he gained confidence and trust of not only the second respondent but also other jewellers. The complaint of the second respondent is that on 22.09.2008 the petitioner took from him loose diamonds worth Rs.23,14,520/- on the pretext of supplying or selling the same to one Mahesh of Mahesh Diamonds of Hyderabad promising to pay the price by 25.10.2008 but thereafter he disappeared and did not pay the price. The further version of the second respondent is that the petitioner took the diamonds from him promising to pay the price amount to him but did not pay that amount and therefore the petitioner committed the offence of cheating. With regard the offence under Section 409 IPC i.e. misappropriation by an agent, the plea of the second respondent or the prosecution is that the petitioner acted as an agent of the second respondent in taking the diamonds from him and since he misappropriated the same he is guilty of the offence under Section 409 IPC also which deals with criminal breach of trust by an agent. The other allegations in the charge sheet pertain to giving of complaint by the second respondent and the efforts by the police in arresting the petitioner and ultimately filing the charge sheet. 4. The plea of the petitioner is that even according to the second respondent he has also been supplying precious stones to the second respondent and other jewellers and that he has also been taking diamonds and other precious stones from the second respondent and other jewellers and that all these transactions are business transactions and therefore the second respondent’s version that he took away the diamonds and did not pay the price does not amount to a criminal offence and at best he can only sue him for recovery of the price. It is his plea that the transaction is to be treated purely as a commercial transaction. In another breath the petitioner also denied that he ever took diamonds in question from the second respondent. 5. The learned counsel for the petitioner reiterated the above pleas of the petitioner and further argued that the complaint itself shows that there were business transactions between him and the second respondent and looked at from that point of view the allegations in the charge sheet cannot be said to disclose any criminal offence at all and that the second respondent has given a criminal offence colour to a purely civil transaction. In support of this contention the petitioner’s counsel also placed reliance upon Ram Biraji Devi v. Umesh Kumar Singh[1], M/s.Indian Oil Corporation v. M/s. NEPC India Ltd.[2], Chava Venu v. State of A.P.[3], M.A.Gaffar v. State of A.P.[4] and Ashok Chaturvedi v. Shitul H. Chanchani[5]. 6. On the other hand the learned counsel for the second respondent pointed out that in the normal course of trade nobody would part with diamonds worth Rs.23 lakhs and odd to a stranger and that the second respondent gave diamonds in question to the petitioner only because of the acquaintance between them and taking advantage of the same the petitioner cheated him in the manner indicated above. Basing on this contention and the allegations in the charge sheet the second respondent’s counsel argued that the said allegations in the charge sheet do disclose the offences mentioned in it and therefore this court should not interfere in the matter and allow the trial court to go ahead with it. 7. The learned Additional Public Prosecutor also supported the stand of the second respondent’s counsel and he even stated that the petitioner can as well move for a discharge before the trial court and establish his pleas. He further pointed out that the various pleas raised by the petitioner would also fall within the purview of disputed questions of fact as all of them relate to the merits of the matter and therefore this court should not entertain this petition. In the face of the above rival contentions the point is now taken up. 8. The charge sheet allegations and the respective contentions of the parties have already been set out supra. The charge sheet allegations would show that the second respondent parted with the diamonds in question and gave possession of them to the petitioner on a representation made by the latter that he would fetch a price of Rs.23 lakhs and odd after selling them to Mahesh and that he would pay the price by 25.10.2008 and that thereafter he did not pay them and disappeared. There may be earlier transactions between the parties but this is not a case where there was a running account between the second respondent and the petitioner and even it is not the case of the petitioner that there was such a running account and that each owed amounts mutually to the other. Thus according to the charge sheet allegations there was a one sided transaction where the petitioner took the diamonds from the second respondent and disappeared without paying the price. The offence of cheating is defined in Section 415 IPC. It covers a transaction where a person on a representation that he would pay the price of an article makes or induces that person to part with it in his favour without having any intention of paying for it. If all the charge sheet allegations are proved to be true they would constitute an offence of cheating as defined in Section 415 IPC and as diamonds which are property are involved Section 420 IPC also gets attracted. This is also not a case where the petitioner executed some valuable documents such as a promissory note or gave any other valuable security to the second respondent for the price of the diamonds when he took them. This is another circumstance which would also on the charge sheet allegations support the prosecution version that there is cheating. 9. Then coming to the applicability of Section 409 IPC it is the version of the second respondent that the petitioner was acting as a broker i.e. as an agent not only for himself but other jewellers also and it is in that capacity he entrusted the diamonds to the petitioner. In other words, the very description of the petitioner as a broker which is a common parlance word for an agent would mean that the petitioner was being treated as an agent as contended by the second respondent’s counsel and in that view of the matter it can be said that the second respondent having parted with the diamonds in favour of the petitioner treating him as his agent it can be said that prima facie the offence under Section 409 IPC is also attracted on the charge sheet allegations. Of-course, I must hasten to add here that ultimately whether the above charges are true or not has to be decided on evidence in the trial and the applicability of the above two offences is stated only on the charge sheet allegations as they stand. Thus, in my opinion, it cannot be said that this is a case where even if the charge sheet allegations are believed in their entirety they do not disclose any offence at all. So far as the acquaintance between the petitioner and the second respondent is concerned it is true that the version of the second respondent itself shows that there was acquaintance between them. It should be noted that it is only such acquaintance which makes one person to part with a valuable thing in favour of the other for nobody would part with valuable diamonds as in this case in favour of a stranger. Thus this mere acquaintance cannot be a ground to accept the contention of the petitioner that liability is purely a civil liability even though there may be earlier transactions between them. 10. In Ram Biraji Devi case (1 supra) the Supreme Court was dealing with a fact situation in which a criminal complaint was filed by the purchaser of immovable property under an agreement of sale when the seller ultimately refused to sell the property after receiving part of the consideration. It was on that fact situation held in that decision that the allegations do not disclose any criminal offence at all and they showed only breach of a contract and civil liability and the remedy of the purchaser there was only to vindicate his right in a civil suit. 11. Then in M/s.Indian Oil Corporation case (2 supra) their lordships were dealing with a fact situation in which M/s.NEPC India Limited hypothecated two of its aircrafts in favour of M/s.Indian Oil Corporation in respect of the dues payable by the former to the latter in connection with the aviation fuel supplied. Thereafter M/s.NEPC India Limited, though there were subsequent agreements, is alleged to have the removed the engines fitted in the said two aircrafts. Their lordships of the Supreme Court held that though the allegations did not constitute criminal breach of trust as the property belonged to M/s.NEPC India Limited, the removal of engines from the two aircrafts would constitute the offence of cheating. Their lordships discussed at length about the growing tendency in the business circles to convert purely civil disputes into criminal cases and observed that that tendency has been growing but at the same time their lordships in the above case observed that notwithstanding the earlier transactions between the parties, the removal of the engines from the two aircrafts amounts to cheating. It may be noted that the proposition laid down in this case more supports the plea of the second respondent or prosecution. 12. Then in Chava Venu case (3 supra) this court was dealing with a case where the complainant in the said case purchased paddy worth Rs.10 lakhs and supplied the same to petitioner’s mill therein and the petitioner paid Rs.6 lakhs but failed to pay the balance. In that fact situation this court held that the question of cheating did not arise as the dispute was only with regard to the payment of balance for which a civil remedy lies. 13. Then in M.A.Gaffar case (4 supra) this court was again dealing with a fact situation where there were mutual business transactions and some amounts had fallen due from the alleged accused therein to the complainant and for the said amounts the accused therein also executed promissory notes in favour of the complaint. In that fact situation it was held that the question of cheating did not arise as promissory notes were already executed and the allegations therein also did not disclose any offence of criminal breach of trust also. 14. Then in Ashok Chaturvedi case (5 supra) their lordships were dealing with a case where it was alleged by the complainant that his 100 equity shares in the company of the seven of the accused who were directors of the company at the time of offence were transferred by forging his signatures and the directors were responsible for forged signatures. The Supreme Court held that though the allegations made therein do disclose offences of cheating and forgery and creating of false documents the complainant did not place before the learned Magistrate any material to show that the seven accused who were directors of the said company were in any way responsible for that mischief. In that view of the matter the Supreme Court quashed the case against them. 15. What should be noted is that in each of the above cases except the case of M/s.Indian Oil Corporation case (2 supra) and Ashok Chaturvedi case (5 supra) the fact situation prima facie predominantly disclosed that the disputes were of a civil nature. In the present case the allegations are that the second respondent parted with valuable diamonds worth Rs.23 lakhs and odd in favour of the petitioner on a representation made by him that he would fetch the price and pay him by 25.10.2008 from the other alleged buyer but did not pay the amount. It is also not the case of the petitioner that he gave the diamonds to Mahesh and he failed to pay the price and the charge sheet also does not show that the petitioner has entrusted diamonds to said Mahesh. However this aspect has to be considered by the trial court. It may be true that this transaction was one of the business transactions between the petitioner and the second respondent but in my opinion the allegations do show cheating. Since it is the plea of the de facto complainant that the petitioner has acted as his agent and misappropriated the diamonds the offence under Section 409 IPC will also apply. 16. It may also be noted that a transaction may give rise to a civil liability and as well as a criminal liability and in the present case it is true that the second respondent will also have a remedy of recovering the value of diamonds on civil side from the petitioner if his case is true and the above allegations would also equally show criminal offences on the part of the petitioner. Thus it cannot be said that merely because the second respondent has got a right to recover the price of the diamonds he could not pursue his remedies on the criminal side. The aforesaid decisions are distinguishable on facts and do not support the case of the petitioner. On the other hand the principle laid down in M/s.Indian Oil Corporation case (2 supra) weighs against petitioner. 17. Now parting with the matter it may be noted that what all that has been stated and held are based on the charge sheet allegations and in my opinion for the aforesaid reasons they show criminal offences. Of-course the de facto complainant/ prosecution have to prove their case before the trial court. The other pleas taken by the petitioner pertain to his innocence and they are all disputed questions of fact and they have to be decided on evidence or in a petition which he may file for his discharge in the court below before the matter goes for framing of charges. Accordingly for the aforesaid reasons the point is decided in the negative and this petition is dismissed. It is also made clear that the trial court shall proceed to dispose of the matter without being influenced in any manner by this order. _____________________ N. RAVI SHANKAR,J 26th July, 2011 CVRK [1] AIR 2006 SC 2035 = (2006) 6 SCC 669 [2] AIR 2006 SC 2780(1) [3] 2005 (2) ALD (Crl.) (NOC) 17 (AP) [4] 2007 (1) ALD (Crl.) 811 (AP) [5] (1998)7 SCC 698