IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL. Criminal Misc. Application No. 747 of 2007 Sardar Pritpal Singh S/o Malindra Singh, R/o Victory Cyber Café Karanpur, P.S. Dalanwala District Dehradun ………. Petitioner. Versus 1- State of Uttarakhand 2- Raj Kumar, Maheshwari S/o Late Munshi Ram Maheshwari, R/o 69, Old Dalanwala, Dehradun ……. Respondents. Sri Vipul Sharma, learned counsel for the petitioner. Mr. Mohd. Azam, learned counsel for the respondent No.2. Learned A.G.A. for the State. Dated: January 10, 2008. Hon’ble B.C. Kandpal, J. By way of this petition, under Section 482 of the Cr.P.C. the petitioner, who is facing trial in Criminal Case No. 1145 /2004, State Vs. Sardar Malinder Singh and others, U/Ss 406, 420 I.P.C., pending in the Court of C.J.M. Dehradun, has prayed for quashing of the proceeding of the aforesaid Criminal Case. 2- Brief facts of the case are that a First Information Report was lodged by the respondent No. 2, Raj Kumar Maheshwari against the petitioner and other persons, U/Ss 406 and 420 I.P.C. and the police after investigation, submitted charge sheet against the petitioner as well as the other accused persons. 3- The petitioner has challenged the proceedings of the criminal case on the ground that the offence U/Ss 406 and 420 I.P.C. is not made out against him as well as the remedy to approach the Civil Court of competent jurisdiction is available to the respondent No. 2 and the criminal proceedings have been initiated the petitioner only in order to harass him. 4- Sri Mohd. Azam Advocate has appeared on behalf of the respondent No. 2 and has filed the counter affidavit stating therein that the offence U/Ss 406 and 420 I.P.C. is made out against the petitioner as well as there is no abuse of process of Court in this case. He has also submitted on the basis of the counter affidavit filed by him that during the course of the trial the charges have been framed against the petitioner as well as the two other accused persons and certain witnesses have been examined before the trial Court, therefore, there is no occasion to quash the criminal proceeding pending against the petitioner at this stage. 5- Heard Sri Vipul Sharma, learned counsel for the petitioner, learned A.G.A. for the respondent No. 1 and Sri Mohd. Azam, learned counsel for the respondent No.2, and perused the record. 6- The First Information Report itself indicates that one Sardar Malindra Singh, and his son Pritpal Singh formed a committee, about 17 years ago and in that committee all the members use to collect money and thereafter every member of the committee after the completion of the stipulated time use to get certain amount from the pool. In the First Information Report allegation was made that when certain amount was to be made available to some members of the committee, Pritpal Singh did not pay that amount to those members, hence committed criminal breach of trust. It has further been alleged in the Report that the accused persons also cheated certain members of the Committee. 7- From perusal of the First Information Report, it is quite clear that the committee was formed by the petitioner and his father about 17 years ago and since then the money transaction was being made by the accused persons to certain members of the committee and there had been no dispute during the aforesaid period. 8- From the totality of the circumstances of the case, it appears that utmost it can be a case of under- payment and non-payment and allegation of this nature would bring the matter within the purview of the civil liability and the case with regard to non- payment and under-payment of the money, by itself, does not amount to commission of an offence of cheating or criminal breach of trust. 9- The Hon’ble Apex Court in a case Hridaya Ranjan Prasad Verma and others vs. State of Bihar and another, reported in (2000) 4 S.C.C. 168, has observed as follows: “14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the persons deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. 15.In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore, it is the intention, which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.” 10- The Hon’ble Apex Court further in a case Vir Prakash Sharma Vs. Anil Kumar Agarwal and another, reported in (2007) 3 SCC (Cri) 370, has held that the dispute between the parties with regard to non-payment or under-payment of price of goods by itself does not amount to commission of offence of cheating or criminal breach of trust. Hence, offence under Sections 406 and 420 of I.P.C. would not be made out. 11- On bare perusal of the pleadings of the parties and the material available before me, I am satisfied that the criminal proceeding initiated against the petitioner is wholly unwarranted. The report lodged against the petitioner as well as the other accused persons is an abuse of process of court and the proceedings are, therefore, liable to be quashed. 12- Even if all the averments made in the report are taken to be true, yet the case for prosecution under Sections 406 and 420 I.P.C. is not made out, specially, under the circumstance that the committee by the petitioner along with other persons was formed 17 years ago and all the members of the committee had to be benefited from pool amount of the committee as was agreed by all the members while forming the committee, then in case if the petitioner has failed to pay some of the amount to certain members of the committee, then it cannot be said that the petitioner has cheated its members or the complainant specifically. 13- For both the offences, i.e. U/Ss 406 and 420 I.P.C. the inducement must be fraudulent or dishonest. Here, in the present it does not appear from any evidence that there was a fraudulent or dishonest intention with the petitioner. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Further, mere failure to pay the amount to certain members of the committee by the petitioner, will not bring the petitioner within the ambit of the offence U/Ss 406 and 420 I.P.C. In case, if the prosecution against the petitioner is allowed to continue, that will amount to abuse of process of Court. 14- For the reasons stated above, the proceedings of the Criminal Case No. 1145/2004, State Vs. Sardar Malinder Singh and others, U/Ss 406 and 420 I.P.C., pending in the Court of C.J.M., Dehradun, are hereby quashed. 15- Accordingly, the petition is allowed. 16- However, in case if the respondent no.2 feels so, he may seek the redressal of his grievance before the competent court of jurisdiction by civil remedy. (B.C. Kandpal, J.) ISB