Case: Samir Sahay @ Sameer Sahay Vs. State of U.P. &amp; Another

3. The brief facts giving rise to this appealCompany, namely, M/s. Aneja Consultancy (hereinafter referred to as the Company) was founded in the year 1984 by one I.J. Aneja as Chairman. Father of the appellant, Major P.C. Sahay (Retd.) joined the Company as Branch Manager at District Fatehpur. Several persons including appellant as well as respondent No.2 deposited different amounts in the Company. Respondent No.2 and his wife deposited total amount of Rs. 86,000/in the Company in June/July, 1987. The owner/Proprietor of the Company on 20.06.1996 made a public declaration that the owner would bear the full liability and responsibility of all deposits made by various investors across the country and employees and staff of the Company have no personal liabilities to repay to the investors. The Company faced a financial trouble, cash/liquidity crunch and was unable to make repayment of the money of the investors. Respondent No.2 lodged First Information Report on 30.05.1998 against the appellant and his father Major(Retd.) P.C. Sahay under Section 420 IPC. A Case Crime No.386 of 1998 was registered against the appellant under Section 420 IPC. A criminal writ petition was filed challenging the FIR dated 30.05.1998 by the appellant as well as his father Major P.C. Sahay(Retd.). The High Court vide its judgment dated 21.10.2016 stayed the arrest of the appellant till submission ofwhereas prayer of the father of the appellant to stay of arrest was rejected. Respondent No.2 and his wife filed a complaint before District Consumer Forum, Fatehpur against the Chairman of the Company/Proprietor and Managing Director of the Company praying for realisation of the amount deposited in June/July, 1997 along with interest and Rs. 2000/as expenditure of the litigation. The complaint was filed on 09.11.1998.The Police carried out investigation in Criminal Case NO.386 of 1998 recorded the statement of respondent No.2 and his wife and aNo.358 of 2001 dated 14.10.2001 was submitted by the Police under Section 420 IPC. The cognizance was taken on 15.02.2002. The appellant filed an application for discharge alleging that neither sufficient allegations are made nor evidence to prosecute the appellant under Section 420 IPC was produced. Chief Judicial Magistrate rejected the application for discharge vide his order dated 28.02.2007 against which Criminal Revision was filed by the appellant in the High Court. The Criminal Revision has been dismissed on 21.10.2016 against which order this appeal has been filed.

Court's reasoning:
11. After lodging the First Information Report, respondent No.2 and his wife had also filed Petition No.318 of 1998 before the District Consumer Forum, Fatehpur against Inderjeet Aneja, Proprietor of Aneja Consultancy, President and Managing Director of Aneja Financial Services Limited and Aneja Group of Companies. In the complaint filed before the District Consumer Forum neither the appellant nor his father was arrayed and no allegation was made against the appellant and his father in the complaint. It is also relevant to note that the said complaint filed by respondent No.2 and his wife ultimately was allowed by the District Consumer Forum on 27.12.2006. The District Consumer Forum directed the amount as claimed to be paid within 15 days after receiving the copy of the order.Again in Dalip Kaur and others v. Jagnar Singh and another, 2009 (14) SCC 696 , this Court noticed the ingredients of Section 420 IPC. In paragraphs 9 to 11 following wasingredients of Section 420 of the Penal CodeDeception of anyFraudulently or dishonestly inducing any person to deliver any property;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 orHigh Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants bythe amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code. (See Ajay Mitra v. State of M.P., 2003 (3) SCCcannot furthermore be any doubt that the High Court would exercise its inherent jurisdiction only when one or the other propositions of law, as laid down in R. Kalyani v. Janak C. Mehta, 2009 (1) SCC 516  is attracted, which are as under: (SCC p. 523, paraThe High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizableFor the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by theSuch a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actusIf the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue.Applying the ratio laid down by this Court as noted above, it is clear that ingredients of Section 420 IPC are not made out in the present case, either from the First Information Report or from any other material. From the First Information Report as extracted above only allegation made against the appellant was that he accompanied his father Major P.C. Sahay (Retd.) when he assured that the money of the applicants will not be lost and it shall be the responsibility of his father(late P.C. Sahay).The Chief Judicial Magistrate while rejecting the application of the appellant for seeking discharge has not even referred to any allegation or evidence on the basis of which it can be said that ingredients of Section 420 IPC were made out in the facts of the present case.We are, thus, of the considered opinion that in the present case ingredients of Section 420 IPC were not made out so as to frame any charge under Section 420 IPC against the appellant.