IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL CRIMINAL CRIMINAL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION CRIMINAL CRIMINAL CRIMINAL WRIT PETITION NO.1185 OF 1998. WRIT PETITION NO.1185 OF 1998. WRIT PETITION NO.1185 OF 1998. A.C. Narayanan. ..Petitioner. versus 1.The State of Maharashtra. 2. Mr. Uday Narayan Ranade. ..Respondents. .... Mr. G.S. Hegde with Mr.C.M. Lokesh, i/b. M/s. Hegde & Associates, for the Petitioner. Mr. D.P.Adsule, APP, for the Respondent-State. None for the Respondent No.2. .... CORAM CORAM CORAM : A.S. OKA, J. : A.S. OKA, J. : A.S. OKA, J. DATE DATE DATE : 7TH AUGUST,2008. : 7TH AUGUST,2008. : 7TH AUGUST,2008. ORAL ORAL ORAL JUDGMENT : JUDGMENT : JUDGMENT : 1. On 7th August 2008, this Writ Petition was called out for final hearing. The learned Counsel appearing for the Petitioner pointed out that a specific notice of the date fixed in the Petition has been served to the Advocate appearing for the second Respondent (original Complainant). None appeared for the second Respondent. The submissions of the learned Counsel appearing for the Petitioner were heard. As none appeared for the second Respondent, Judgment was not dictated on earlier date and the Petition was kept today. When the Petition was called out today, none appears for the second Respondent. Hence, I proceed to deliver the - 2 - Judgment. 2. The second Respondent filed a private complaint alleging commission of offence under sections 406 and 420 of the Indian Penal Code against the Petitioner. The second Respondent claimed that he was the Constituted Attorney of one Mr.Avinash T. Bal, Manager of "Kaustubh Enterprises HUF" and Mrs. Sonia Avinash Bal, the owner of "Business Enterprises". It is stated that the Petitioner was carrying on business in the name of Ravi Investments. A case made out in the complaint is that the Petitioner offered Mr. Avinash Bal to take part in his proposed real estate division of M/s.Harvest Financial Limited. It is alleged that the said Mr. Avinash Bal spent substantial amount and later on it was discovered that the project and promises of the Petitioner were unrealistic. According to the case of the second Respondent, as the said Mr. Avinash Bal decided to dis-associate himself from the Petitioner, the accounts were settled and a memorandum of understanding was drawn. It is stated that the Petitioner gave different cheques to Mr. Avinash Bal aggregating to Rs.1.5 crores. It is stated that as the cheques issued by the Petitioner - 3 - were dishonoured, there were four complaints filed by Mr. Avinash Bal against the Petitioner under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the said Act of 1881"). The case made out in the complaint is that the second Respondent was repeatedly approached by the Petitioner for settlement. It is stated that the Petitioner also approached Mr. Avinash Bal and his Advocates and offered to settle the dispute. Therefore, meetings were held in which the Petitioner offered to pay the entire amount. At that time, a cheque in the sum of Rs. 15 lacs was issued by the Petitioner towards part payment of the amount payable to Mr. Avinash Bal. The said cheque was dishonoured. It is alleged in the complaint that the cheque in the sum of Rs.15 lacs was issued by the Petitioner in discharge of the liability which was the subject matter of the cases under the said Act of 1881 pending before the learned Magistrate. It was alleged that the Petitioner has shown gross disrespect to the Court by allowing the cheque to be dishonoured. The second Respondent alleged that the remedy of filing a case under section 138 of the said Act of 1881 would not be effective. An allegation was made in the said complaint of committing offences - 4 - of criminal breach of trust and cheating. An order was passed by the learned Magistrate in the said complaint directing investigation under section 156(3) of the Code of Criminal Procedure, 1973. The Police registered an offence against the Petitioner punishable under sections 420, 406 of the Indian Penal Code. A charge sheet was filed by the Police after carrying out the investigation. The prayer in this Petition is for quashing the proceeding of the criminal case. 3. The learned Counsel appearing for the Petitioner submitted that going by the averments made in the complaint and by taking statements recorded by the Police for its face value, neither an offence under section 406 nor under section 420 was made out. He submitted that merely because a cheque issued on the basis of settlement between the parties was dishonoured, that by itself will not attract either section 406 or section 420 of the Indian Penal Code. He invited my attention to the terms and conditions of the memorandum of understanding executed between the Petitioner and Mr. Avinash Bal. He pointed out that the complaints filed by the second Respondent under section 138 of the said Act of 1881 which are - 5 - referred to in the complaint subject matter of this petition were dismissed by this Court. He therefore, submitted that it is a fit case to exercise power under section 482 of the Code of 1973 for quashing the proceedings. 4. I have carefully considered the submissions. According to the case made out by the second Respondent, during the course of talks of settlement which took place after filing of the cases under section 138 of the said Act of 1881, the Petitioner issued a cheque in the sum of Rs.15 lacs in favour of the second Respondent towards the part payment of the amount payable by him. Only material averments made in the complaint are in paragraph nos. 8 and 9 which reads thus :- "8. I submit that grass disrespect has been shown by the Accused to the Court by handing down a cheque of Rupees Fifteen Lakhs unbackedly equal sum for its encashment as a part of subject matter before the Court. It is distressing that such an irresponsible action part of the Accused is beyond correction. It would not be effective remedy - 6 - to file a case u/s. 138 of the Negotiable Instruments Act, 1881 against within a case of Negotiable Instruments Act, 1881. This is similar to a man suffering lift imprisonment for murder committing another murder during his sentence term. 9. In the above circumstances, the Accused has clearly committed criminal breach of trust and cheating which are penal cognizable offences and has rendered himself liable for punishment for the same." 5. The statement of the second Respondent was recorded by the Police during the investigation. In the said statement, the second Respondent stated thus :- " I filed four cases under section 138 which are pending in the court of Metropolitan Magistrate, 22nd Court Room, Andheri. During the pendency of the said cases, Shri Narayanan expressed his desire for a compromise, time and again. During one such occasion, we had a meeting with Shri - 7 - Narayanan and as agreed therein Shri Narayanan handed over us a cheque for Rs.15,00,000/- (Rupees fifteen lakhs only) in lieu of the amount due in the said cases. Reposing faith in him, we decided to accept the cheque. At that time Shri Narayanan assured that the cheque would be honoured. Believing his word, we deposited the cheque with Samrao Vitthal Bank, Vile Parle (East). But this cheque also bounced. This ensured us that Shri Narayanan had given us this cheque with the purpose of cheating us." Further the statement of the second Respondent was recorded in which there is a vague allegation made that right from the beginning the Petitioner acted with an intention of cheating. 6. If the averments made in the complaint and in the statement are taken for its face value, an offence under section 420 was surely not made out as it is not asserted that an intention to deceive was in existence at the time when inducement was offered by the Petitioner. Unless the second Respondent alleges that the Petitioner-Accused had a dishonest - 8 - intention at the time of when the Petitioner agreed to part with a sum of Rs.15 lacs, the non-payment of the amount would not amount to an offence under section 420 and it may only amount to a breach of promise. In his complaint and the statement before the Police, the aforesaid ingredients are totally absent. 7. In so far as alleged commission of offence of breach of trust is concerned, the law is very well settled that every breach of trust may not result in penal offence. An act of breach of trust involves a civil wrong, but a breach of trust with mens rea gives rise to a criminal prosecution as well. 8. As stated earlier, the only allegation made against the Petitioner is that the cheque issued by him in the sum of Rs.15 lacs was dishonoured and he has shown dis-respect to the Court in which complaints under section 138 of the said Act of 1881 were pending. Thus, no ingredients of an offence under section 406 of the Indian Penal Code were made out both in the complaint as well as in the statement of the second Respondent. Thus, on plain reading of the averments made in the complaint and the material - 9 - on record, no case is made out, much less, a prima-facie case of offence under sections 406 and 420 of the Indian Penal Code. Hence, a case is made out for quashing the criminal proceedings. 9. Rule is accordingly made absolute in terms of prayer clause (a). As a consequence of grant of relief in terms of prayer clause (a), the learned Magistrate will pass consequential order of releasing the passport. [ A.S.OKA, J.] A.S.OKA, J.] A.S.OKA, J.]