Case: Subodh S. Salaskar Vs. Jayprakash M. Shah

3. The relationship between the parties hereto was that of a borrower and creditor. A financial loan of Rs. 1,70,000/- was obtained by the appellant in 1996 from the respondent No. 1, which according to him has been paid off. Two post dated cheques, one bearing No. 460157 dated 6.12.1996 for a sum of Rs. 26,900/- and the other bearing No. 460158 dated 28.09.2000 for a sum of Rs. 1,70,000/-, however, were handed over to him.4. Appellant contends that the amount of loan was repaid in cash. Admittedly, the cheques were presented before the bank on 10.01.2001. They were returned to the respondent No. 1 by the bank alleging that no such account, in the name of the appellant was in operation. A legal notice dated 17.01.2001 was sent by speed post asking the appellant to pay the said amount of Rs. 1,70,000/- failing which legal action including criminal action would be taken against him.5. A complaint petition alleging commission of an offence under Section 138 of the Act, however, was filed only on 20.04.2001.6. Indisputably, the complaint petition was sought to be amended for adding Section 420 of the Indian Penal Code in the complaint petition. The said application was allowed by an order dated 14.08.2001.7. Appellant filed an application for discharge on 16.12.2003 inter alia on the premise that the said complaint petition was barred by limitation. It was dismissed by an order dated 14.11.2006. The revision application filed by the appellant before the learned Additional Sessions Judge was also dismissed. A criminal writ petition filed by the appellant marked as Criminal Writ Petition No. 330 of 2007 before the High Court of Bombay has been dismissed by reason of the impugned judgment holding:(i) The question as to whether the complaint is barred by limitation is a mixed question of law and fact. Even otherwise as a result of amendment of Clause (b) of Section 142 of the Act even if delay has been caused in filing the complaint, the Magistrate has power to condone the delay;(ii) Although the Magistrate could not have allowed amendment of the complaint petition but as it discloses sufficient averments in regard to commission of an offence under Section 420 of Indian Penal Code, the Trial Court was justified in issuing the process in respect of the said provision also.

Court's reasoning:
28. Noticing the ingredients of cheating, this Court in Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd. and Ors., [JT 2008 (1) SC 340 ], heldbare perusal of Section 415 read with Section 420 of the Indian Penal Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage.22. For the said purpose, we may only notice that blank cheques were handed over to the accused during the period 2000-2004 for use thereof for business purposes but the dispute between the parties admittedly arose much thereafter i.e. in 2005. In B. Suresh Yadav v. Sharifa Bee 2007 (12) SCALE 364 , it was held;13. For the purpose of establishing the 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. In a case of this nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. We do not, however, mean to lay down a law that the liability of a person cannot be both civil and criminal at the same time. But when a stand has been taken in a complaint petition which is contrary to or inconsistent with the stand taken by him in a civil suit, it assumes significance. Had the fact as purported to have been represented before us that the appellant herein got the said two rooms demolished and concealed the said fact at the time of execution of the deed of sale, the matter might have been different. As the deed of sale was executed on 30.9.2005 and the purported demolition took place on 29.9.2005, it was expected that the complainant/first respondent would come out with her real grievance in the written statement filed by her in the aforementioned suit. She, for reasons best known to her, did not choose to do so. No case for proceeding against the respondent under Section 420 of the Indian Penal Code is therefore, made out.23. Filling up of the blanks in a cheque by itself would not amount to forgery. Whereas in the complaint petition, allegations have been made that it was respondent Nos. 2 and 3 who had entered into a conspiracy to commit the said offence as indicated hereinbefore, in the counter affidavit, it has been alleged that the employees of the Respondent Company did so.The cheques were post dated ones. Admittedly they were issued in the year 1996. They were presented before the bank on a much later date. They were in fact presented only on 10.01.2001. When the cheques were issued, the accounts were operative. Even assuming that the account was closed subsequently the same would not mean that the appellant had an intention to cheat when the post dated cheques were issued. Even otherwise the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety do not disclose commission of an offence under Section 420 of the Indian Penal Code. They do not satisfy the ingredients of the suit provision. It is, therefore, in the fact situation obtaining in the instant case, difficult to hold that the provisions of Section 420 of the Indian Penal Code were attracted.