ORDER
Ramesh Ranganathan, J.
1. This petition is filed to quash the proceedings in C.C. No. 410 of 2004 on the file of Judicial Magistrate of I Class, Nandyal. The petitioners herein are accused 3 and 5 in C.C. No. 410 of 2004 for offences under Sections 418, 420, 425 and 427 IPC.
2. A complaint was filed in Cr. No. 100 of 2004 before the Nandyal III Town Police Station by the complainant, a partnership firm carrying on business in the supply of cotton bales on short term credit, against six accused. The Ist accused is a cotton mill represented by its Executive Director, the 2nd accused is the Executive Director and accused Nos. 3 to 6 are the Directors of the 1st accused mill.
3. Since the rival contentions revolve mainly around the question as to whether the uncontroverted allegations in the complaint/charge sheet, even if accepted as true, make out a case against the petitioners herein, of their having committed the offences of which they are charged, it is necessary to extract the relevant portions of the complaint:
The accused being regular customer of the complainant firm have requested to supply cotton bales on short term credit basis and on the request of the accused the complainant opened a running account for the supplies and payment being made from time to time. On the order placed by the accused mill; from 4-2-1997 onwards the complainant has supplied cotton on short term credit basis to the worth of Rs. 59,31,014/- on different dates at different intervals under different final invoices up to 6-3-1997 towards the said credit supply the accused mill has paid Rs. 48,44,875/ on different dates from 8-3-1997 by way of D. D. and cheques. After deducting the said payments still and amount of Rs. 10,86,139/- being due towards principal supply of cotton apart from interest. The 2nd accused also issued confirmation balance receipt on behalf of mill from time to time and extended the limitation also.
The complainant further humbly submits that since the accused stopped the business with complainant, the complainant demanded the accused to pay the balance amount of Rs. 10,86,139/- along with interest due to the complainant. The accused approached the complainant with the malice intention of not to pay money, and refused to pay the same. As such the accused who fraudulently induced complainant to supply cotton, with a malice intention to evade the payment and to cause monetary damages to the complainant and so the accused is liable for penal action for cheating and mischief also.
It is further submitted that though having knowledge about the long standing due to the complainant, the accused with a mala fide intention to cause loss, is now intending to screen away all their properties and leave from their original place. Having illegal intention in their minds, the first accused going on changing the entire body of directors to escape; from liability which tantamount nothing but cheating and mischief, and so, the accused is liable to be punished for their illegal acts towards complainant, the complainant herewith furnishing relevant xerox copies of documents in support of the case. Thus the accused has committed an offence under 418, 420 and 427 of I. P.C. and liable to be punished.
That the complainant has been demanding the accused to pay the money since the date of stopping of business. But the accused, dodged the matter on some pretext or other with an intention on to evade payment. The complainant came to know about the malice intention of accused only on 26-6-2004 when the complainant discussing about the above said due through phone conversation at Nandyala and suspected the bona fides. So, under the above forced circumstances, the complainant has no other go except touches the door step of justice byway of filing a private complaint against the accused.
4. After investigation, the charge sheet, in C.C. No. 410 of 2005. was filed. The allegations in the charges sheet are that the defacto-complainant was a firm, under the name and style of Soundarya Cotton Industries, near Bommalasatram of Nandyal town, which used to export cotton bales to different places on short term credit. The 2nd accused, on behalf of the 1st accused, being a regular customer of the complainant's firm had requested them to supply cotton bales on short term credit and on the request of the accused, the complainant opened a running account for payment towards such supplies. Subsequently the complainant supplied cotton bales to the accused on credit for Rs. 59,31,014/-, towards which the accused had paid an amount of Rs. 48,44,875/- by way of demand drafts and cheques. In spite of repeated requests made by the complainant the accused failed to pay the balance amount due of Rs. 10,86,139/- towards principal apart from interest. Though they had knowledge of the long standing dues to the complainant, the accused had caused mischief evading payment of the amounts due intentionally and fraudulently and, in spite of repeated demands, the accused were trying to screen away the 1st accused's properties with dishonest intention and to deceive the complainant. The accused are alleged to have committed offences under Sections 418, 40, 425 and 427 IPC.
5. Sri. D. Prakash Reddy, learned Senior Counsel appearing on behalf of Smt. A. Anasuya, learned Counsel for the petitioner, would submit that even if the uncontroverted allegations in the complaint were to be read as a whole, and accepted in its entirety as true, no case had been made out against the petitioners herein of their having committed the offences of which they are charged. Learned Senior Counsel would submit that, while non-payment of the amount due would, at best, result in a civil liability, in the absence of a specific allegation in the complaint that the accused had, at the very inception, induced the complainant to part with its property with the dishonest intention to deprive them of the property, the ingredients of Section 420 IPC cannot be said to be attracted. Learned Senior Counsel would submit that the allegations, in the complaint and the charge sheet regarding non-payment of the amounts due, or the subsequent event of the Board of Directors of the 1st accused company being changed or for that matter properties being taken away would not amount to cheating, since the dishonest intention must have 'been in existence at the very inception. Learned Senior Counsel would submit that failure to subsequently fulfil the earlier promise or inability of the accused to make payment of the amounts due would not at-: tract the ingredients of Section 420 IPC. Learned Senior Counsel would place reliance on State of Haryana v. Ch. Bhajan Lal : 1992CriLJ527 and Uma Shankar Gopalika v. State of Bihar 2005 (10) SCC 336 and submit that since the ingredients of Sections 418 and 420 IPC are not attracted, even if the allegations in the complaint and the charge sheet were read as a whole and accepted in its entirety as true, the proceedings in C.C. No. 410 of 2004, on the file of the Judicial Magistrate of I Class, Nandyal, was liable to be quashed. Learned Senior Counsel would submit that, while the petitioners herein may have the remedy of seeking discharge, they ought not to be relegated to undergo the ordeal of a trial as no prima facie case, of the petitioners having committed the offence of which they are charged, has been made out by the respondent complainant herein. Learned Senior Counsel places reliance of Pepsi Foods Ltd. v. Special Judicial Magistrate : 1998CriLJ1 in this regard.
6. Sri O. Kailashnath Reddy, learned Counsel appearing on behalf of the respondent complainant, would submit that the allegations in the complaint would reveal that the accused had the intention to cheat the accused at the very inception and it is only on a prima facie case, of the accused having committed offences under Sections 418,420, 425 and 427 IPC, being made out, had the learned Magistrate taken cognizance of the offence. Learned Counsel would submit that, since the learned Magistrate had exercised his discretion in taking cognizance of the offence, such exercise of discretion did not warrant interference since this Court is required to exercise Jurisdiction under Section 482 Cr. P.C. only in the rarest of rare cases and not as a matter of course. Learned Counsel would rely on Madhu Limaye v. State of Maharashtra : 1978CriLJ165 and submit that the remedy available to the petitioner was to seek discharge under Section 239 Cr. P.C. and not by invoking the jurisdiction of this Court under Section 482 Cr. P.C. Learned Counsel would submit that since a prima facie case, of the petitioners having committed offences under, Sections 418, 420, 425 and 427 IPC, has been made out, it was not for this Court to weigh the evidence or minutely examine the allegations in the complaint. Learned Counsel would submit that mathematical accuracy was not required and when two different versions, one by the accused and the other by the complainant, were placed, this Court in proceedings under Section 482 Cr. P.C. would neither indulge in the exercise of appreciation of the evidence on record nor examine the rival contentions to interfere with the discretion exercised by the learned Magistrate in taking cognizance of the offence. Learned Counsel would rely on Mushtaq Ahmad v. Mohd. Habibur Rehman Faizi : 1996CriLJ1877 , Rajesh Bajaj v. State NCT of Delhi : 1999CriLJ1833 , State of Karnataka v. M. Devendrappa (2002) SCC (Crl.) 539 : 2002 Cri LJ 998, State of Andhra Pradesh v. Golconda Linga Swamy 2004(2) AID (Crl) 751 (SC), State of Bihar v. Rajendra Agarwalla 1996 (1) ALD (Crl.) 38 (SC), S. M. Datta v. State of Gujarat 2001(2) ALD (Crl.) 553 (SC) : 2001 Crl LJ 4195, M. Devendrappa 2002 Crl LJ 998, Devarpalli Veda Nayakam v. State of A. P. 2003 (1) ALD (Crl.) 145 (AP) and Akula Siva Durga Prasad v. State of A. P. 2003 (1) ALD (Crl.) 147 (AP)
7. Before examining the rival contentions, it is necessary to first deal with the contention that since the petitioners have an effective remedy of filing an application seeking discharge under Section 239 Cr. P.C. the petition now filed under Section 482 Cr. P.C. is not maintainable. In Madhu Limaye, the Apex Court observed:.At the outset the following principles may be noticed in relation to the exercise of the inherent power of the High Court which have been followed ordinarily and generally, almost invariably, barring a few exceptions:
(1) That the power is not to be resorted to if there is a specific provision in the Code for the redress of the grievance of the aggrieved party;
(2) That it should be exercised very sparingly to prevent abuse of process of any Court or otherwise to secure the ends of justice;
(3) That it should not be exercised as against the express bar of law engrafted in any other provision of the Code....
8. In Ch. Bhajan Lal 1992 Cri LJ 527 the Supreme Court referred to Amar Nath v. State of Haryana : 1977CriLJ1891 and Madhu Limaye and thereafter with approval to State of W. B. v. Swapan Kumar Guha AIR 1982 SC 949 and held that if an offence is disclosed, the Court would not normally interfere with an investigation into the case and would permit investigation into the offence alleged to be committed. However, if the material allegations do not disclose an offence, no investigation should normally be permitted. The Apex Court, by way of illustration, gave the categories of cases where the power under Section 482 Cr. P.C. was required to be exercised either to prevent abuse of process of Court or otherwise to secure the ends of Justice. It is true that category 6 thereunder refers to cases where there is a specific provision in the Criminal Procedure Code providing efficacious redress for the grievance of the aggrieved party, but as has been pointed out by Sri D. Prakash Reddy, learned Senior Counsel, these illustrated categories of cases are those where the High Court is required to exercise its Jurisdiction under Section 482 Cr. P.C. and not those where its Jurisdiction is barred. Learned Senior Counsel would submit that mere existence of an alternate remedy would not disentitle this Court from exercising its jurisdiction under Section 482 Cr. P.C., and that, in cases where no offence has been made out, this Court is duty bound to exercise its Jurisdiction under Section 482 Cr. P.C. In Pepsi Foods 1998 Crl LJ 1. The Apex Court observed..No doubt the Magistrate can discharge the accused at any stage of the trial if he considers the charge to be groundless, but that does not mean that the accused cannot approach the High Court under Section 482 of the Code or Article 227 of the Constitution to have the proceeding quashed against him when the complaint does not make out any case against him and still he must undergo the agony of a criminal trial....
9. Since the jurisdiction under Section 482 Cr. P.C. must be exercised to prevent abuse of process of Court or otherwise to secure the ends of justice, on a clear case being made out justifying its interference, this Court would not, normally, refuse to exercise its jurisdiction under Section 482 Cr. P.C. merely on the ground that there is a remedy available under the provisions of the Criminal Procedure Code itself.
10. The next question which arises for consideration is as to whether the uncontroverted allegations in the charge sheet, if accepted as true, make out a case against the petitioners accused of their having committed the offences of which they are charged. In this context, it is necessary to take note of the provisions of Sections 415, 418 and 420 IPC which read as under:
415. Cheating : Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, arid which act or omission causes or is likely to cause damage or harm to that person in body, mind reputation or property, is said to 'cheat'.
Explanation : A dishonest concealment of fact is a deception with the meaning of this section.
Illustrations
(a) A, by falsely pretending to be in Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A cheats.
(b) A, by putting a counterfeit mark on an article intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the articles. A cheats.
(c) A, by exhibiting to Z a false sample of an article, intentionally deceives Z into believing that the article corresponds with the sample, and thereby dishonestly induces to Z to buy and pay for the article. A cheats.
(d)) A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonoured, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
(e) A, by pledging as diamonds articles which he knows are not diamonds, intentionally deceives Z, and thereby dishonestly induces Z to lend money. A cheats.
(f) A intentionally deceives Z in the belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.
(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity to indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards break his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.
(h) A intentionally deceives Z into a belief that A has performed A's part of a contract made with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats.
(i) A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receives the purchase or mortgage money from Z. A. cheats.
418. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect:
Whoever cheats with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest in the transaction to which the cheating relates, he was bound, either by law, or by a legal contract, to protect, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.420 Cheating and dishonestly inducing delivery of property:Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
11. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury, which forms the basis of a civil claim, may also constitute the ingredients of a crime punishable under the criminal law. In a dispute, arising out of a transaction involving passing of valuable properties, the aggrieved person may have a right to sue for damages or compensation. At the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of cheating. Facts may give rise to a civil claim and also amount to an offence. Merely because a civil claim is maintainable it does not mean that a criminal complaint cannot be maintained. Trisuns Chemical Industry v. Rajesh Agarwal : 1999CriLJ4325 ; L: almuni Devi v. State of Bihar 2001 (1) ALD (Crl) 220 (SC) : 2001 AIR SCW 2504.
12. It has to be borne in mind that when parties commit a wrongful act constituting a criminal offence, they cannot be allowed to walk away with the impression that no action can be taken against them. A wrongful or illegal act such as cheating may give rise to both a civil as well as a criminal action when it is clear from the complaint and sworn statements that the necessary ingredients constituting an offence of cheating are made out. (S. W. Palnitkar v. State of Bihar 2002 SCC (Crl) 129 : 2001 Cri LJ 4765.)
13. The distinction between mere breach of contract and an offence of cheating, though a fine one, must nevertheless be kept in mind. It depends upon the intention of the accused at the time of inducement, which may be judged by his subsequent conduct. The substance of the complaint is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequence. What happened subsequently can be taken into consideration for the purpose of finding out as to what could have been the intention of the person at the time when he made the representation. The subsequent conduct is however not the sole test. It will depend upon the facts of each case. It is possible that when a man makes a promise, he would expect to fulfil the promise but subsequent circumstances and events may justify his inability to fulfil the promise. In these circumstances, it cannot be said that the person who made the promise made it falsely, (Anil Mahajan v. Bhor Industries Ltd, and another 2006 (1) SCC (Crl.) 746.)
14. In order to attract the ingredients of Section 420 read with 415 IPC, there must be a fraudulent or dishonest inducement on the part of the person and thereby the other party must have parted with his properly. To establish an offence under Section 420 IPC, it must be shown that there was a fraudulent and dishonest intention at the time of commission of the offence and that the person practising the deceit had obtained the property by fraudulent inducement and wilful misrepresentation. Merc breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction, that is at the time when the offence is said to have been committed. It is the intention which is the gist of the offence. In order 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 the promise subsequently such a culpable intention right at the beginning, i.e., when he made the promise, cannot be presumed. If the core postulate of dishonest intention, in order to deceive the complainant, is not made out even accepting all the averments in the complaint on their face value, the complaint is liable to be quashed. Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168 : 2000 Crl LJ 2983. An honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. Alpic Finance Ltd. v. P. Sadasivan : 2001CriLJ1246 .
15. The intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. 'Dishonesty' has been defined in Section 24 IPC to mean deliberate intention to cause wrongful gain or wrongful loss; and when with such intention, deception is practised and delivery of property is induced then the offence under Section 420 IPC can be said to have been committed. To deceive is to induce a man to believe that a tiling is true which is falser and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. State of Kerala v. A.P. Pillai : 1972CriLJ1243 ; Dr. Sharma's Nursing Home v. Delhi Administration 1998 (8) SCC 745; Alpic Finance Ltd.
16. The complainant must allege, either expressly or by necessary implication, that at the time when the representation was made it was not only false but also that the person who made such false representation knew that it was false and with that knowledge he had made such a representation making the other party believe such representation and had thereby induced the party deceived to deliver the property.
17. It is only where a fraudulent representation leads to delivery of property, which is dishonestly retained, that the ingredients of Section 415 IPC are established. On a reading of Section 415 IPC it is manifest that in the definition there are set forth two separate classes of acts which the person 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 inducement must be fraudulent or dishonest. In the second class of acts, the inducement must be intentional but not fraudulent or dishonest. (Hriday Ranjan Prasad).
18. Where the complaint, and the documents annexed thereto, make out a prima facie case of cheating, it is not for the High Court to consider the version of the accused given out in their petition filed under Section 482 Cr. P.C. vis-a-vis that of the complainant and enter into the debatable area of deciding which of the versions is true. (Mushtaq Ahmad). It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary for the complainant to state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelt out in the complaint is impermissible. If factual foundation for the offence has been laid in the complaint Courts should not hasten to quash criminal proceedings merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR the information in the complaint must so bereft of even the basic facts which are absolutely necessary for making out the offence.
19. That the facts narrated in the complaint reveal a commercial or money transaction is hardly a reason for holding that the offence of cheating would elude such a transaction. In fact, many a cheating is committed in the course of commercial and money transactions. The crux of the postulate of cheating is the intention of the person who induces the victim of his representation, and not the nature of the transaction, which would become decisive. High Courts ought not to adopt a hypertechnical approach and sieve the complaint for testing the ingredients under Section 418 IPC, Such an endeavour may be Justified during trial, but not at the stage of investigation, (Rajesh Bajaj)
20. Now the judgments cited across the bar.
21. In Mushtaq Ahmad the appellant, in his complaint, stated that he was a teacher and at the material time the respondents were the Manager, Principal, Teacher and Member of the Managing Committee of the School. The appellant went on leave for higher education to Saudi Arabia. When he came back he found that his salary and dearness allowance, for the period of his absence, had been drawn by the respondents, from Government funds, forging his signature. According to the complaint the respondents had committed breach of trust of Government money. In support of these allegations made in the complaint, copies of the salary statements of the relevant periods were produced. On the Magistrate taking cognizance of the offence, the respondents filed proceedings under Section 482, Cr. P.C. and the Allahabad High Court quashed the complaint on the ground that it was false, frivolous and vexatious. On a special leave petition being filed, the Supreme Court held:.In spite of the fact that the complaint and the documents annexed thereto clearly made out a prima facie case for cheating, breach of trust and forgery, the High Court proceeded to consider the version of the respondents given out in their petition filed under Section 482. Cr. P.C. vis-a-vis that of the appellant and entered into the debatable area of deciding which of the versions was true. - a course wholly impermissible in view of the above quoted observations in the case of Bhajan Lal AIR 1992 SC 604....
(Emphasis supplied)
22. In Rajesh Bajaj, the appellant filed a complaint under Section 402, Cr. P.C. The allegations made therein were that the 5th respondent had approached the complainant for- purchase of ready-made garments of various kinds and had induced the appellant to believe that the 4th respondent would pay the price of the said goods on receipt of the invoice. He had also promised to make payment within fifteen days from the date of the invoice of the goods which the complainant was required to despatch to Germany, Believing the said representation as true the complainant despatched goods worth 4,48,597,25 DM (Deutsche Marks). While the respondents, on receipt of 37 different invoices, got the goods released and sold them they, however, paid only a sum of 1,15,194 DM. According to the appellant, the 5th respondent had induced him to believe that he was a genuine dealer but his actual intentions were not clear. It was alleged in the complaint that the appellant had sent one of his representatives to Germany for realising the amounts and though the respondents had agreed to pay the amounts due, they did not honour even that subsequent understanding. The appellant came to know later about the modus operandi which the respondents had adopted in regard to certain other manufacturers who too were duped by the respondent to the tune of ten crores. This complaint was quashed by the Delhi High Court on the ground that the complaint did not disclose an offence of cheating under Section 420, I.P.C., that there was nothing in the complaint to suggest that the accused had a dishonest or fraudulent intention at the time the respondents had exported goods worth 4,46,597.25 DM, that there was nothing to indicate that the accused had induced the complainant to export the goods and that, on the face of the allegations contained in the complaint, it was purely a commercial transaction wherein the seller did not pay the balance amount due, towards the goods received by him, as per his assurance. On the complaint being quashed and on a special leave petition being filed there against, the Supreme Court observed:. It is not necessary that a complainant should verbatim; reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has, been laid in the complaint the Court should not hasten to quash criminal proceedings during Investigation stage merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence.
It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions. One of the illustrations set out under Section 415 of the Indian Penal Code (Illustration f) is worthy of notice now:
(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money. A not intending to repay it. A cheats.The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not. The complainant has stated in the body of the complaint that he was induced to believe that the respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of the respondent were not clear. He also mentioned that the respondent after receiving the goods had sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities.
The High Court seems to have adopted a strictly hypertechnical approach had sieved the complaint through a cullendar of finest gauzes for testing the ingredients under Section 415. I.P.C. Such an endeavour may be justified during trial, but certainly not during the stage of investigation. At any rate, it is too premature a stage for the High Court to step in and stall the investigation by declaring that it is a commercial transaction simpliciter wherein no semblance of criminal offence is involved....
(Emphasis supplied)
23. In M. Devendrappa, excise contracts were awarded,some of which were subleased to the 1st accused. As part of the arrangement of sub-lease, the 1st accused was required to produce a bank guarantee from a Nationalised Bank, The allegations in the charge-sheet were that the letter heads of 'Karnataka Bank Limited' were surreptitiously removed and fake bank guarantees were typed out on stamp papers, fake seals were used and signed by the 2nd accused posing to be the Manager of Karnataka Bank Ltd. These bank guarantees were submitted, as if they were genuine, to the Deputy Commissioner of Excise. The 1st accused introduced the 2nd accused to the Excise Sub-Inspector as if he was the Manager of the Bank and caused service on him of a notice addressed to the Manager of the Bank by the Deputy Commissioner of Excise. The Karnataka High Court analysed the background facts and held that involvement of the excise officials could not be ruled out and as they had been indicated to be the witnesses, the likelihood of prejudice could not also be ruled out. It was also observed that there was no 'definite evidence' to show that accused Nos. 1 and 2 were directly involved, that there was no material to hold that the accused had committed theft of 'letter heads' from Karnataka Bank Limited and/or they had committed forgery for the purpose of cheating or had used as genuine forged documents or had cheated the Government. The learned Judge held that there was no evidence to infer common intention to commit such offences. Aggrieved thereby then the State Government approached by way of special leave, the Supreme Court observed:.Exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The section does not confer any new powers on the High Court. It only saves the inherent power which the Court possessed before the enactment of the Code....While exercising powers under the section, the Court does not function as a Court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone Courts exist. Authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the Court has power to prevent abuse. It would be an abuse of process of the Court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers Court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of Court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the Court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations arc accepted in toto.
In R.P. Kapur v. State of Punjab : 1960CriLJ1239 this Court summarised some categories of cases where inherent power can and should be exercised to quash the proceedings.
(i) Where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction;
(ii) where the allegations in the First Information Report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
(iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
In dealing with the last case, it is important to bear in mind the distinction between a case where there is no legal evidence or where then: is evidence; which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process should not be an instrument of oppression, or needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any Court or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan Lal : 1992CriLJ527 . A note of caution was, however, added that the power should be exercised sparingly and that too in rarest of rare cases.
As noted above, the powers possessed by the High Court under Section 482 of the Code arc very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest Court of a Stale should normally refrain from giving a prima facie decision in a case where the entire facts arc incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (See Janata Dal v. H.S. Chowdhary and Raghubir Saran (Dr.) v. State of Bihar (sic). It would not be proper for the I High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under 5. 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event before would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings....
(Emphasis supplied).
24. In S.M. Datta, the Inspector of factories filed the complaint alleging violation of Section 63 of the Factories Act on the ground that the workers employed in the factory were ordered to work without their names being included in the attendance register of workers and against the working hours shown in the Notice in Form XIV displayed in the factory. On the complaint being quashed and the matter carried in appeal, the Supreme Court observed:
A long catena of cases, some of which stand referred by us hereinbefore in this judgment, signify one principle rule that the complaints ought not to be quashed at the initial stages unless they are termed to be an abuse of the process of the Court, the complaint in question in our view, cannot be so termed as such, we do not find any justification for interference with the order as passed by the High Court....
25. In Golconda Linga Swamy, a complaint was filed by the Prohibition and Excise Officer alleging that the accused were transporting and storing black jaggery/molasses for the purpose of manufacturing illicit distilled liquor. This Court quashed the complaint holding that there was no material to show that the seized articles were intended to be used for manufacturing illicit distilled liquor. On the matter being carried in appeal to the Supreme Court it was held:.Whether the material already in existence or to be collected during investigation would be sufficient for holding the concerned accused persons guilty has to be considered at the time of trial. At the time of framing the charge it can be decided whether prima facie case has been made out showing commission of an offence and involvement of the charged persons. At that stage also evidence cannot be gone into meticulously. It is immaterial whether the case is based on direct or circumstantial evidence-Charge can be framed, if there are materials showing possibility about the commission of the crime as against certainty. That being so, the interference at the threshold with the F.I.R. is to be in very exceptional circumstances as held in R.P. Kapoor AIR 1960 SC and Bhajan Lal : 1992CriLJ527 .
Ultimately, the acceptability of the materials to fasten culpability on the accused persons is a matter of trial....
(Emphasis supplied)
26. In Rajendra Agrawalla, a truck loaded with pieces of iron tacks, which was the property of BCCL, was seized. On enquiry the driver of the truck stated that the truck had been loaded from the factory of the accused. However they could not produce any documents. An F.I.R. was registered, investigation carried out, and on a charge-sheet being filed, the learned Magistrate took cognizance of the offence. The proceedings were quashed by the Patna High Court under Section 482, Cr. P.C. Aggrieved thereby, the State of Bihar went in appeal and the Supreme Court observed:.Bearing in mind the aforesaid parameters if the charge-sheet and the FIR filed in the case in hand are examined and the impugned order of the High Court is tested, the conclusion becomes irresistible that the High Court exceeded its jurisdiction by trying to appreciate the evidence and coming to a conclusion that no offence is made out. On examining the material on record and the impugned judgment of the High Court we are of the considered opinion that the High Court was wholly unjustified in invoking its inherent power under Section 482 of the Code of Criminal Procedure to quash the cognizance taken inasmuch as the allegation in the FIR and material referred to in the charge-sheet do make out an offence under Section 414 of the Indian Penal Code, so as far the respondent is concerned....
(Emphasis supplied)
27. In Rajesh Agarwal, the gist of the complaint was that the accused-Directors had approached the complainant and had offered to supply 5450 metric tons of 'toasted soyabean extractions' at a price of nearly 41/2 crores. The rate quoted by the accused was higher than the market price. The complainant was required to pay the price in advance as demanded by the accused and accordingly payment was made through cheques1. The accused, however, sent commodity of inferior and substandard quality. The complainant produced xerox copies of the reports obtained from the laboratory, to which the sample of the commodity was sent for testing, which had opined that the commodity was of 'most inferior and substandard quality.' The complainant alleged that he suffered a loss of nearly Rs. 17 lakhs under the said consignment alone, that he was induced to pay the price on the representation that the best quality commodity would be supplied, that the price was paid on such representation, and that, by supplying inferior quality, the accused had deceived the complainant and had committed the offence of cheating under Section 420, I.P.C. On the complaint being filed, the learned Magistrate forwarded it for investigation under Section 156(3), Cr. P.C. On a petition filed under Section 482, Cr. P.C. to quash the complaint, the Gujarat High Court held that since there was a specific clause in the memorandum of understanding that disputes, if any, arising between the parties in respect of any transaction, can be resolved through arbitration and since supplies had been received by the complainant without any objection and had been exported, the question whether the complainant suffered loss or not were all matters to be adjudicated by the Civil Court and could not be the subject-matter of criminal proceedings.
When the matter was carried in appeal, the Supreme Court observed:.Time and again this Court has been pointing out that quashing of FIR or a complaint in exercise of the inherent powers of the High Court should be limited to very extreme exceptions (vide Bhajan Lai and Rajesh Bajaj).
In the last referred case this Court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations:
It may be that the facts narrated in the present complaint would as well repeal a commercial transaction or money transaction. But that is hardly a reason for holding that foe offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions.We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme case as indicated in Bhajan Lal....
(Emphasis supplied).
28. In Lalmuni Devi, the Supreme Court held:.There could be no dispute to the proposition that if the complaint does not make out an offence it can be quashed. However, it is also settled law that facts may give rise to a civil claim and also amount to an offence. Merely because a civil claim is maintainable does not mean that the criminal complaint cannot be maintained. In this case, on the facts, it cannot be stated, at this prima facie stage, that this is a frivolous complaint. The High Court does not state that on facts no offence is made out. If that be so, then merely on the ground that it was a civil wrong the criminal prosecution could not have been quashed....
29. In Devarpalli Veda Nayakam, the complainant requested the accused, a principal of a school, to provide him a job, for which the accused demanded Rs. 85,000/-. The complainant gave Rs. 40,000/- in two instalments and thereafter she was called for interview and was appointed on a monthly salary of Rs. 2,525/-. The complainant gave a further sum of Rs. 20,000/-. Alleging that the accused had promised to give her an aided post, that she was neither appointed nor salary was paid to her for the period of 21/2 years which she worked and that the accused had cheated her and had committed an offence under Section 420, I.P.C., the complaint was filed. Seeking to have this complaint quashed when a petition under Section 482, Cr. P.C. was filed, this Court held:.A close scrutiny of the charge-sheet and the Section 161. Cr. P.C. statements, clearly disclose that the 2nd respondent parted with the amounts before appointment orders were issued. The correctness or otherwise of the same, can only be decided during the trial as it requires placing necessary material before the Court. The Court has to see whether there is any prima facie material to file the charge-sheet by the police and whether the Magistrate took cognizance of the offence, on sufficient material.
I am of the considered view, that the averments in the charge-sheet and Section 161. Cr. P.C. statements are sufficient material to take cognizance of the offence. I disagree with the contention of the learned Counsel for the petitioner that he was not having intention to deceive from the beginning. In any view of the matter, that is a fact to be decided during the trial and cannot be decided by drawing inference on the strength of the material placed.
If the contents of averments in the charge-sheet are taken as a whole along with the material collected by the police, it certainly constitutes an offence punishable under Section 420. I.P.C. It is not a case where the Court can exercise inherent power to quash the proceedings, inasmuch as there is sufficient material to take cognizance of the offence under Section 420, I.P.C. and the learned Magistrate has rightly taken cognizance....
(Emphasis supplied)
30. In Anil Mahajan, a memorandum of agreement was executed between the accused and the complainant, for a three and half months period, whereunder as against the monthly quantities to be supplied, 50% of payment was to be given in advance and the balance 50% on receipt of goods. While the complainant delivered Rs. 3.38 crores of steel grip tapes, during the said three and half month period of the agreement, the accused made only part payment of Rs. 3.05 crores leaving a balance amount of Rs. 33.23 lakhs due to be paid. The complainant alleged that, after making part payment, the accused did not make any further payment despite repeated reminders and started giving reasons such as cash problems, sales tax assessment problems etc., besides raising disputes, in respect of the material purchased six years ago as being defective. The complainant alleged that the memorandum of understanding had been signed with the mala fide and criminal intention of grabbing money and goods from the complainant's company. On a complaint being filed, the learned Magistrate issued process against the accused holding that from the complaint and the documents, it was clear that the accused intended to deceive the complainant. It is in this context that the Supreme Court observed:.A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction....
The substance of the complaint is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequence. Except mention of the words 'deceive' and 'cheat' in the complaint filed before the Magistrate and 'cheating' in the complaint filed before the police, there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into MOU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay....
(Emphasis supplied).
31. In Alpic Finance Ltd., the complainant alleged that the accused was not regular in making payment, that he had committed default in payment of instalments, that the bank had dishonoured certain cheques issued by him, and that on physical verification certain chairs were found missing from the premises of the accused. This formed the basis for the allegation that the accused had committed the offence of cheating and had caused misappropriation of the property belonging to the complainant. In this context, the Supreme Court observed:.The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrong-doer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420. I.P.C. and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint-there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by wilful misrepresentation. We are told that the respondents, though committed default in paying some instalments, have paid substantial amount towards the consideration....
(Emphasis supplied)
32. In S.W. Palanitkar, an agreement was entered into between the accused and the complainant whereunder the complainant was appointed as a consignment stockist subject to certain terms and conditions. On expiry, the agreement was extended on the same terms and conditions. The complainant served notice on the Marketing and Regional Manager of the Company requesting them to make payment of Rs. 15,00,000/-or in the alternative to refer the disputes for arbitration. Thereafter, the accused-company offered to supply Ammonium Sulphate to the complainant for the year 1997-98 on certain terms and conditions. This offer was rejected by the complainant finding the terms unreasonable and thereafter the complaint was filed under Sections 406 and 420, I.P.C. alleging that the accused had been wrongfully squeezing money from the complainant, they had used the money payable to him for their own benefit and had cheated the complainant by practicing fraud. The complainant alleged that the accused had also cheated him by using the office and godown premises on the basis of the false assurances given to him and without paying any amount for such costly and valuable premises. On summons being issued by the Chief Judicial Magistrate, the accused approached the High Court under Section 482, Cr. P.C. and on dismissal of the petition, approached the Supreme Court. The Apex Court held:.It is clear from the allegations made in the complaint and the sworn statements that appellant 1-company entered into an agreement with respondent 2 on certain terms and conditions. It is alleged that appellant 7 went to Patna and contacted respondent 2 and induced him to enter into an agreement assuring him of huge profit. At the time of arriving at such an agreement, none of the other appellants either met respondent 2 or induced him to enter into any agreement with a view to cheat him. The agreement was further renewed for a period of one year. It is not the case that there was no supply of goods at all as it has come on record that there was supply of 400 tons of fertilizer, may be it was far less than the required quantity. The allegations made against the appellants other than appellant 7 are very vague and bald. From the material that was placed before the Magistrate, even prima facie, it cannot be said that there was conspiracy or connivance between the other appellants and appellant 7. If the appellants have committed breach of agreement, it is open to respondent 2 to seek redressal in a competent Court or forum to recover damages, if permissible in law in case he had sustained any loss, In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.
Looking to the complaint and the grievances made by the complainant therein and having regard to the agreement, it is clear that the dispute and grievances arise out of the said agreement. Clause 29 of the agreement provides for reference to arbitration in case of disputes or controversy between the parties and the said clause is wide enough to cover almost all sorts of disputes arising out of the agreement. As a matter of fact, it is also brought to our notice that the complainant issued a notice dated 3-10-1997 to the appellants invoking this arbitration clause claiming Rs. 15 lakhs. It is thereafter the present complaint was filed. For the alleged breach of the agreement in relation to commercial transaction, it is open to respondent 2 to proceed against the appellants for his redressal for recovery of money by way of damages for the loss caused, if any. Merely because there is an arbitration clause in the agreement, that cannot prevent criminal prosecution against the accused if an act constituting a criminal offence is made out even prima facie.
Many a times, complaints are filed under Section 200.' Cr. P.C. by the parties with an oblique motive or for collateral purposes to harass, to wreck vengeance, to pressurize the accused to bring them to their own terms or to enforce the obligations arising out of breach of contract touching commercial transactions instead of approaching Civil Courts with a view to realise money at the earliest. It is also to be kept in mind that when parties commit a wrongful act constituting a criminal offence satisfying necessary ingredients of an offence, they cannot be allowed to walk away with an impression that no action could be taken against them on the criminal side. A wrongful or illegal act such as criminal breach of trust, misappropriation, cheating or defamation may give rise to action both on civil as well as on the criminal side when it is clear from the complaint and sworn statements that necessary ingredients of constituting an offence are made out. May be parties are entitled to proceed on civil side only in a given situation in the absence of an act constituting an offence but not to proceed against the accused in a criminal prosecution. Hence before issuing a process a Magistrate has to essentially keep in mind the scheme contained in the provisions of Sections 200-203. Cr. P.C. keeping in mind the position of law stated above and pass an order judiciously and not mechanically or in a routine manner.
The learned Magistrate, in our view, having regard to the facts stated and the legal position explained above, committed a serious error in issuing the process against appellants 1 to 6 and 8 for offences under Sections 406, 420 and 120-B, I.P.C. when the acts alleged against them did not constitute these offences satisfying their ingredients even prima facie. In the light of the material brought on record at that stage process could have been issued only as against appellant 7, that too for an offence under Section 420, I.P.C. only.
The High Court dismissed the petition filed under Section 482, Cr. P.C. by the impugned order placing reliance, in particular, on two decisions of this Court, one Trisuns Chemical Industry and Medchl Chemicals and Pharma (P) Ltd. v. Biological E. Ltd. : 2000CriLJ1487 . In the first case, this Court held that the exercise of inherent power should be limited to very extreme exceptions. Further it was held that referring the disputes to arbitration is not an effective substitute for a criminal prosecution when the disputed act is an offence. It may be noted that the said judgment gets attracted only when the disputed act is an offence, which the High Court has failed to notice. No doubt, exercise of inherent power under Section 482. Cr. P.C. by the High Court should be limited to very extreme exceptions but in a case where ingredients of alleged offences are not satisfied, even prima facie, it cannot be said that power under Section 482. Cr. P.C. should not be exercised to quash the process issued by a Magistrate. In the case of Nagawwa it is laid down that in such a case, power under Section 482, Cr. P.C. can be exercised to quash the process issued by a Magistrate....
(Emphasis supplied).In the case on hand, we have already stated above that except against appellant 7, no offence was made out against the remaining appellants as the ingredients of offences alleged against them were not satisfied. Unfortunately, the High Court failed to exercise jurisdiction under Section 482, Cr. P.C. to correct manifest error committed by the learned Magistrate in issuing process against appellants 1-6 and 8 when the alleged acts against them did not constitute offences for want of satisfying the ingredients of the offences. The approach and considerations while exercising power and jurisdiction by a Magistrate at the time of issuing process are to be in terms of Sections 200 - 203 under Chapter XV. Cr. P.C. having due regard to the position of law explained in various decisions of this Court, and whereas while exercising power under Section 482. Cr. P.C. the High Court has to look at the object and purpose for which such power is conferred on it under the said provision. Exercise of inherent power is available to the High Court to give effect to any order under Cr. P.C, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. This being the position, exercise of power under Section 482, Cr. P.C. should be consistent with the scope and ambit of the same in the light of the decisions aforementioned. In appropriate cases, to prevent judicial process from being an instrument of oppression or harassment in the hands of frustrated or vindictive litigants, exercise of inherent power is not only desirable but necessary also, so that the judicial forum of Court may not be allowed to be utilised for any oblique motive. When a person approaches the High Court under Section 482, Cr. P.C. to quash the very issue of process, the High Court on the facts and circumstances of a case has to exercise the powers with circumspection as stated above to really serve the purpose and object for which they are conferred....
(emphasis supplied)
33. In Hridaya Ranjan Prasad Verma, the complainants had agreed to sell land to the accused and, on registration of the sale deeds, the accused handed over three cheques for Rs. 5.5 lakhs which, on presentation, were dishonoured on the ground of insufficient funds. Prior to execution of the sale deeds, one of the brothers of the complainant had filed a title suit for partition and an interim order was passed restraining the complainants from disturbing the status quo of transfer in respect of certain other lands. However, no injunction was passed in respect of the land for which the complainants had registered a sale deed in favour of the accused. On the cheques being dishonoured, the complainants made several requests for payment which was avoided by the accused promising to make payment within a short period. On finding that the accused had no intention to pay the amount, a complaint was lodged under Sections 406 and 420,1.P.C.
34. In turn the accused filed another complaint alleging that the complainant had committed an offence under Sections 418 and 420,I.P.C, that the complainants had suppressed facts relating to pending cases and that their filing the complaint had lowered the prestige and reputation of the accused. Alleging that the subsequent complaint, filed by the accused, was as a counter-blast to their earlier complaint, the complainants sought to have the subsequent complaint quashed. It is in this context that the Supreme Court observed:.On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person 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
In determining the question it has to be kept in mind that the distinction between mere breach or 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.
Judged on the touchstone of the principles noted above, the present case, in our considered view warrants interference inasmuch as the ingredients of the offence of cheating punishable under Section 420, I.P.C. and its allied offences under Sections 418 and 423 has not been made out. So far as the offences under Sections 469, 504 and 120-B are concerned even the basic allegations making out a case thereunder are not contained in the complaint. That being the position the case comes within the first category of cases enumerated in State of Haryana v. Bhajan Lal : 1992CriLJ527 and as such warrants interference by the Court. Reading the averments in the complaint in entirety and accepting the allegations to be true, the ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction has neither been expressly stated nor indirectly suggested in the complaint. All that respondent 2 has alleged against the appellants is that they did not disclose to him that one of their brothers had filed a partition suit which was pending. The requirement that the information was not disclosed by the appellants intentionally in order to make respondent 2 part with the property is not alleged expressly or even impliedly in the complaint. Therefore the core postulate of dishonest intention in order to deceive the complainant-respondent 2 is not made out even accepting all the averments in the complaint on their face value. In such a situation continuing the criminal proceeding against the accused will be, in our considered view, an abuse of the process of the Court. The High Court was not right in declining to quash the complaint and the proceeding initiated on the basis of the same....
(Emphasis supplied)
35. In Dr. Sharma's Nursing Home, a complaint was filed alleging that the complainant's brother was required to undergo a minor operation and the complainant. While looking out for a good Nursing Home with adequate surgical facilities the complaint came across an advertisement of the appellant wherein it was mentioned that all modern facilities were available in his nursing home and that all the rooms were air conditioned. The complainant approached the second appellant who also confirmed that, besides other facilities, air-conditioned rooms were available. Impressed by his statement, the complainant got his brother admitted for operation but found, to his utter surprise, that the room which was provided to him was not air-conditioned, even though he was charged for such a room. The complaint was dismissed by the Magistrate holding that no offence under Section 420, I.P.C. was made out. The learned Sessions Judge, in revision, held that if an air-conditioned room was, in fact, available but could not be given for some defect then of course it would amount to a breach of contract but since the evidence had come that none of the rooms were air-conditioned in the said Nursing Home nor was one provided to the petitioner, the concealment of the fact would amount to deception falling within the definition of cheating as defined under Section 415, I.P.C. On the other of the learned Sessions Judge being confirmed by the High Court, the appellants approached the Supreme Court. It is in this context that the Supreme Court held:.We have carefully gone through the complaint, the documents annexed thereto and the deposition of the complainant. On a perusal thereof, we are unable to hold that a prima facie case under Section 420. I.P.C. has been made out. From the judgments of the Additional Sessions Judge and the High Court, we find that both the learned Courts have rested their findings on deception only and did not go into the question whether the complaint and its accompaniments disclosed the other essential ingredient of the offence under Section 420. I.P.C. namely, dishonest inducement. 'Dishonesty' has been defined in Section 24. I.P.C. to mean deliberate intention to cause wrongful gain or wrongful loss: and when with such intention, deception is practised and delivery of property is induced then the offence under Section 420. I.P.C. can be said to have been committed. Judged in that context, we find that there are no materials from which it can be said even prima facie that the appellant 'dishonestly induced' the complainant to part with his money....
(Emphasis supplied)
36. In Hari Prasad Chamaria v. Bishun Kumar Surekha : 1974CriLJ352 , a complaint was filed by the appellant alleging that the respondents had stated that they would start transport business of which the appellant would be the proprietor and the respondents would work as his agents. The appelant paid Rs. 35,000/- to the respondents. Later when the appellant went to Calcutta he found that the respondents were doing transport business but had not shown the appellant as the proprietor. On being remonstrated, the respondents are said to have informed that they were trying to get the 'Drang Transport Corporation' registered and they would show the name of the appellant as the proprietor. According to the complaint, though the respondents had agreed to settle the business accounts in the month of December each year, they had failed to render accounts, and on being asked the respondents are said to have stated that they were carrying on business in Nepal and that, as and when the amounts were received, the accounts could be gone into. The appellant asked that the amount deposited by him be refunded and failure of the respondents to comply with the demand for payment, resulted in a complaint being filed under Section 420, I.P.C. On cognizance being taken and process being issued, the respondents approached the High Court. The High Court held that mere breach of contract could not give rise to a criminal prosecution, that the appellant had a remedy to approach the Civil Court and could not be allowed to fight the matter in the Criminal Court. The criminal proceedings, against the respondents, were quashed. On an appeal being preferred to the Supreme Court, it was held:.For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct-Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420. Indian Penal Code. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35,000. There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35,000 by deceiving him. It is further not the case of the appellant that a representation was made by the respondents to him at or before the time he paid the money to them and that at the time the representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the respondents for the offence of cheating....
(Emphasis supplied).
37. In A.P. Pillai, the Supreme Court observed:.It may be that the accused could not keep up the delivery of the oil tins to the railways and no tins could be despatched in respect of the said thirteen railway receipts but that fact can give rise only to a civil liability of the accused. It is not sufficient to fasten a criminal liability on them. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfil the promise....
(Emphasis supplied)
38. In R.P. Kapoor v. State of Punjab : 1960CriLJ1239 , the Supreme Court indicated the categories of cases where the inherent jurisdiction of the High Court under Section 561-A, Cr. P.C. (presently Section 482, Cr. P.C.) can and should be exercised for quashing the proceedings..It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. However, we may indicate some categories of cases where the inherent jurisdiction can and should be exercised for quashing the proceedings. There may be cases where it may be possible for the High Court to take the view that the institution or continuance of criminal proceedings against an accused person may amount to the abuse of the process of the Court or that the quashing of the impugned proceedings would secure the ends of justice. If the criminal proceeding in question is in respect of an offence alleged to have been committed by an accused person and it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding the High Court would be justified in quashing the proceeding on that ground. Absence of the requisite sanction may, for instance, furnish cases under this category. Cases may also arise where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. In such case it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the Criminal Court to be issued against the accused person. A third category of cases in which the inherent jurisdiction of the High Court can be successfully invoked may also arise. In cases falling under this category the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. In exercising its jurisdiction under Section 561-A the High Court would not embark upon an enquiry as to whether the evidence in question is reliable or not. That is the function of the trial Magistrate, and ordinarily it would not be open to any party to invoke the High Court's inherent jurisdiction and contend that on a reasonable appreciation of the evidence the accusation made against the accused would not be sustained....
(Emphasis supplied)
39. In Sardar Trilok Singh v. Satya Deo Tripathi. : 1980CriLJ822 . the Supreme Court held:.We are clearly of the view that it was not a case where any process ought to have been directed to be issued against any of the accused. On the well settled principles of law it was a very suitable case where the criminal proceeding ought to have been quashed by the High Court in exercise of its inherent power. The dispute raised by the respondent was purely of a civil nature even assuming the facts stated by him to be substantially correct.....The question as to what were the terms of the settlement and whether they were duly incorporated in the printed agreement or not were all questions which could be properly and adequately decided in a Civil Court. Obtaining signature of a person on blank sheet of paper by itself is not an offence of forgery or the like. It becomes an offence when the paper is fabricated into a document of the kind which attracts the relevant provisions of the Penal Code making it an offence or when such a document is used as a genuine document. Even assuming that the appellants either by themselves or in the company of some others went and seized the truck on 30-7-1973 from the house of the respondent they could and did claim to have done so in exercise of their bona fide right of seizing the truck on the respondent's failure to pay the third monthly instalment in time. It was, therefore, a bona fide civil dispute which led to the seizure of the truck....
40. In Ch. Bhajan Lal the Supreme Court referred to certain categories of cases, by way of illustration, wherein the power under Section 482. Cr. P.C. could be exercised either to prevent abuse of process of Court or otherwise to secure the ends of justice..In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the First Information Report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a cage against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 135(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its within or caprice....
(emphasis supplied)
41. In S. W. Palnitkar, after referring to its earlier judgments in Rajesh Agarwal; Nirmaljit Singh Hoon v. State of West Bengal : [1973]2SCR66 and Smt. Nagavva v. Veeranna Shiva-lingappa Konjalgi 1976 (3) SCC 756 : 1976 Cri LJ 1533, the Supreme Court held that before issuing process a Magistrate has to essentially keep in mind the scheme contained in the provisions of Sections 200-203 of Cr: P.C., the position of law and pass an order Judiciously and not mechanically or in a routine manner. While dealing with the powers of this Court under Section 482, Cr. P.C., the Supreme Court observed:.No doubt, exercise of inherent power under Section 482. Cr. P.C. by High Court should be limited to very extreme exceptions but in a case where ingredients of alleged offences are not satisfied even prima facie. it cannot he said that power under Section 482. Cr. P.C. should not be exercised to quash the process issued by a Magistrate. In the case of Smt. Nagawwa, it is laid down that in such a case, power under Section 482, Cr. P.C. can be exercised to quash the process issued by a Magistrate. When a person approaches the High Court under Section 482, Cr. P.C. to quash the very issue of process, the High Court on the facts and circumstances of a case has to exercise the powers with circumspection as stated above to really serve the purpose and object for which they are conferred....
(Emphasissupplied).
42-45. In Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque : 2005CriLJ92 , the Supreme Court held:.As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more go when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (Janata Dal v. H. S. Chowdhary : 1993CriLJ600 and Raghubir Saran (Dr.) v. State of Bihar : 1964CriLJ1 . It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with, In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a ease where the complaint does not disclose any offence or la frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings.
(Emphasis supplied)
46. While it is true that a complainant need not verbatim reproduce, in the body of the complaint, all the ingredients of the offences alleged nor is it open for the Court to split up the; definition into different components of the offence to make a meticulous scrutiny whether all the ingredients have been precisely spelt out in, the complaint, in cases where the information in the complaint is so bereft of even the basic facts which are essential for making out the offence, the complaint is liable to be quashed. (Rajesh Bajaj).
47. The allegations in the complaint must be read as a whole and in its entirety, (R.P. Kapoor, Anil Mahajan, Hridaya Rajnan Prasad Verma, Zandu Pharmaceuticals Works Ltd.) and a prima facie case of the accused having committed the offences of which they are charged must be made out. (Dr. Sharma's Nursing Home). The sub-stance of the complaint must be examined and mere use of the expression cheating, deceit etc. therein |s of no consequence. In the absence of an averment regarding deceit, cheating, fraudulent intention of the accused at the inception wherefrom it can be inferred that the accused had intention to deceive the complainant, it cannot be said that a prima facie case of an offence under Section 420, I.P.C. has made out (Anil Mahajan),
48. The complaint must show that the accused had the dishonest or fraudulent intention at the time when the complainant parted with the property, that the accused had induced him to part with his property deceiving him, that the accused had made a representation to the complainant at or before the time he supplied goods to them and that at the time the representation was made, the accused knew the same to be false. (Hari Prasad Chamaria). The complaint must show that there existed fraudulent and dishonest intention at the time of commission of the offence, that the accused had made a wilful misrepresentation, that there was fraud or dishonest inducement on the part of the accused and thereby the complainant had parted with the property. (Alpic Finance Ltd.). The ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction must either be expressly stated or indirectly suggested in the complaint. (Hridaya Rajnan Prasad Verma).
49. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open for the High Court to quash the same in exercise of its inherent powers under Section 482, Cr. P.C. (Zandu Pharmaceuticals Works Ltd.). In cases where the ingredients of the alleged offences are not satisfied, even prima facie, the power under Section 482, Cr. P.C. must be exercised. (S. W. Palnitkar).
50. In appropriate cases, to prevent judicial process from being an instrument of oppression or harassment in the hands of frustrated or vindictive litigants, exercise of power under Section 482, Cr. P.C. is not only desirable but necessary also, so that the judicial forum of Court may not be allowed to be utilised for any oblique motive. (S. W. Palanitkar).
51. It is necessary, therefore, to refer again to the allegations in the complaint to ascertain as to whether a prima facie case has been made out against the petitioners, of their having committed offences under Sections 418 and 420, I.P.C. The allegations are:
i. The accused were regular customers of the complainant;
ii. They had requested the complainant to supply cotton bales on short term credit;
iii. At the request of the accused, the complainant had opened a running account for the supplies made;
iv. Payments were made by the accused into this running account from time to time;
v. On orders being placed by the accused, the complainant supplied cotton bales worth Rs. 59,31,014/- on short term credit;
vi. These supplies were made on different dates at different intervals under different final invoices during the period 4-2-1997 till 6-3-1997;
vii. Towards these credit supplies, the accused had made payment of Rs. 48,44,875/- on different dates, from 8-3-1997 onwards, by way of demand drafts and cheques;
viii. After deducting the amount paid by the accused, an amount of Rs. 10,86,139/-was still due from them towards principal, apart from interest;
ix. The 2nd accused also issued confirmation of balance, on behal fo the mill, from time to time thereby extending the period of limitation;
x. Since the accused had stopped business with it, the complainant had demanded that the accused pay the balance amount of Rs. 10,86,139/- along with interest;
xi. The accused had approached the complainant with the malicious intention not to pay money and had refused to pay the same;
xii. As such the accused had fraudulently induced the complainant to supply cotton with the malicious intention to evade payment and to cause monetary damage to the complainant. The accused were liable for penal action for cheating and mischief;
xiii. Though having knowledge, about the long standing dues to the complainant, the accused with the mala fide intention to cause loss were intending to screen away their properties and leave from their original place;
xiv. Having illegal intention in their minds, the 1 st accused was going on changing the entire body of directors to escape from liability which tantamounted to cheating and mischief;
xv. The accused were liable to be punished for their illegal acts towards the complainant;
xvi. The complainant had demanded payment eversince the date of stopping of business, but the accused dodged the matter on some pretext or the other with the intention to evade payment;
xvii. The complainant came to know about the malicious intention of the accused only on 26-6-2004 when the complainant discussed about it through phone at Nandyal and suspected their bona fides.
52. On a reading of the complaint as a whole, and accepting the allegations made therein as true, while supplies were effected by the complainant to the accused during the period 4-2-1997 to 6-3-1997, payments had already been made by the accused, for a major portion of the supplies, from 8-3-1997 onwards. The allegations, at items xiii to xvii above, are all events after the petitioners-accused had stopped carrying on business with the complainant. There is no allegation in the complaint that there was a fraudulent or dishonest intention at the beginning of the transaction i.e., at the time when the offence was committed. The complaint does not allege that the petitioners had a fraudulent or dishonest intention at the time when supplies, of cotton bales, were effected. There is no averment that the accused had made a representation to the accused at the time of or before the supplies of goods and that the accused knew the representation to be false. The complaint does not allege that the petitioners had a fraudulent or a dishonest intention at the time they had placed an order, for supplies of cotton bales, on 4-2-1997 or at any time prior thereto. The subsequent acts, much after they had stopped business with the complainant, of their changing the Board of Directors, screening away their properties and leaving their original place of business etc., would not attract the ingredients of Section 420, I.P.C., since the necessary postulate of an offence under Sections 418 and 420, I.P.C. is that the intention to cheat must have been in existence at the very inception and not subsequently. Mere failure on their part to keep up the promise subsequently will not give rise to the presumption of their culpable intention right at the beginning i.e., when they had made the promise. (Hridaya Ranjan Prasad Verma).
53. The only portion of the complaint, which Sri Kailashnath Reddy, learned Counsel for the respondent-complainant, would rely upon are those at items (xi) to (xii) above. While the complaint does state that the accused had approached and had fraudulently induced the complainant to supply cotton with the malicious intention of evading payment and that they had refused to pay the amounts due, it must be remembered that the allegations in the complaint must be read as a whole and not piece meal. This allegation, that the accused had approached the complainant with the malicious intention not to pay money and that they had refused to pay the same, is belied by the earlier portion of the complaint itself wherein it is stated that, as against the supplies effected of Rs. 59,31,014/-, the petitioners-accused had paid Rs. 48,44,875/- leaving the balance amount of Rs. 10,86,139/- payable towards principal apart from interest. The complaint does not allege that the accused had approached the complainant and had fraudulently induced him to supply cotton bales with the malicious intention of evading only a part of the amounts due. In Rajesh Bajaj, on which Sri Kailashnath Reddy, learned Counsel for the respondent-complainant, would place great emphasis, the complaint contained allegations that the complainant was induced to believe that the accused would honour payment on account of the invoices, that the accused after receiving the goods had sold them to others and that they did not pay the money and that the complainant came to know later about the modus operandi that the accused had adopted with regards certain other manufacturers who too were duped by the accused to a tune of Rs. 10 crores. It is in this context that the observations found in Rajesh Bajaj were made by the Apex Court. Such observations cannot be read out of context to contend that despite absence of allegations attracting the ingredients of offences under Sections 418 and 420, I.P.C., this Court should refrain from exercising its jurisdiction under Section 482, Cr. P.C. In fact, the Apex Court in Hari Prasad Chamaria. Dr. Sharma's Nursing Home, Hridaya Ranjan Prasad Verma, Alpic Finance Ltd., S. W. Palnitkar and Anil Mahajan had either quashed or upheld the order quashing the complaint on the ground that the complaint, when read as a whole and accepting its contents are true, did not attract the ingredients of Section 420, I.P.C. Since the necessary ingredients of 'cheating' for attracting the offences under Sections 418 and 420, I.P.C. have not been made out, the criminal proceedings in C.C. No. 410 of 2004 are liable to be quashed.
54. The criminal petition is allowed and the proceedings in C.C. No. 410 of 2004 in so far as the petitioner herein, (accused 3 and 5), are alleged to have committed offences under Sections 418 and 420, I.P.C., is accordingly quashed.