Judgment:
M.M. Das, J.
1. In this application under Section 482 Cr.P.C., the petitioner has sought for quashing of the F.I.R. The F.I.R. was lodged on 2.12.2006 by one Nabin Singh as authorized representative of the opp.party No. 2- Manoj Kumar Agarwal. The said F.I.R. was registered as Raghunath Palli P.S. Case No. 284 of 2006 under Section 420 IPC. The informant stating himself to be the authorized representation of Manoj Kumar Agarwal-opp. party No. 2, averred in the F.I.R. that the petitioner was granted a mining lease over an area of 114.93 hectares for manganese and iron ores by the Government of Orissa, in village Dadwan (Inganijharan), Chamkpur, in the district of Keonjhar. The said mine remained idle for which the petitioner approached the opp.party No. 2 for transfer of the said mine in his favour. The opp.party No. 2 was in search of a mine to meet the requirements of raw materials for his manufacturing unit. Accordingly, the petitioner and the opp. party No. 2 entered into an agreement on 6/11.4.2003 for transfer of the mining lease. It was further stated in the F.I.R. that it was agreed to between the parties that the mine will be transferred to the opp.party No. 2 by the petitioner for a sum of Rs. 90 lakhs, to be paid by opp.party No. 2, only after due execution of transfer of mining lease deed in the prescribed form as laid down in the Mineral Concession Rules, 1960. The said amount was to be paid towards the amount's spent by the petitioner for development cost etc. including properties held by him in the mining lease area and adjacent to the area. It was further stipulated that till the transfer of the mining lease is effected in favour of the opp.party No. 2, the petitioner will extract ores from the lease hold area and shall supply the same exclusively to the opp.party No. 2 at a rate 12% less, as being charged by Orissa Mining Corporation, for different grades and sizes. It was further stipulated that the transfer of the mining lease should be completed within a period of two years from the date of execution of the agreement. It is further alleged that the opp.party No. 2 paid Rs. 4 lakhs (rupees four lakhs) as advance to the petitioner for meeting preliminary expenses as per the terms of the agreement. On receipt of the advance amount, the petitioner created a mortgage over some of the properties, particulars of which were mentioned in the F.I.R. as a security, till execution and registration of the transfer of the mining lease, but the opp.party No. 2 subsequently came to learn that the petitioner has already sold the said plots of land prior to execution of the agreement and fraudulently misrepresented to the opp.party No. 2 and induced him to pay the advance of Rs. 4 lakhs. It was alleged that in these circumstances, the petitioner has committed fraud and criminal breach of trust in a well planned manner for cheating the opp.party No. 2
2. Facts of the case further reveal that in the agreement, it was clearly stated that a writ petition being OJC No. 15764 of 1998 is pending in the High Court where this Court has passed an interim order on 25.11.1998 to the effect that no person shall operate the mine unless he has got a lease for the area. It was further indicated in the agreement that all disputes should be settled by the first party before effecting the transfer of mining lease to the second party with a further disclosure of the fact that the dispute, if any, between the first party and M/s. Vijoy Minerals Pvt. Ltd. should be settled by the first party in consultation with the second party so as to work on the area and also to give effect to the transfer deed. In the aforesaid writ petition, which was disposed of by this Court on 7.4.2004, this Court held that it may not be possible to decide the inter se dispute between the petitioner, i.e., the petitioner herein and M/s. Vijoy Minerals Pvt. Ltd., because, the dispute in the writ petition relates to nonrenewal of the mining lease in favour of the petitioner. A direction was issued to the Government to pass fresh orders on the application of the petitioner dated 1.11.1994 for renewal of the lease. It was further stipulated in the said order that in case the State Government passes order renewing the lease in favour of the petitioner, the rights of the petitioner and M/s. Vijoy Minerals Pvt. Ltd. inter se will be governed by the compromise decree between them unless the compromise decree is set aside by an appropriate Court. Further direction was issued that if the petitioner applies to the State Government for operating the mining lease pending orders to be passed by the State Government on the renewal application, it would be open for the State Government to consider the same and pass appropriate orders. All pending Misc. Cases stood disposed of.
3. The compromise decree referred to in the said order was passed in a suit bearing No. 392 of 1994 by the Calcutta High Court filed by said M/s. Vijoy Minerals Pvt. Ltd. against the petitioner. In the said compromise decree dated 1.8.1996, the petitioner was obliged to sell the ores and manganese from the lease hold area of the petitioner to M/s. Vijoy Minerals Pvt. Ltd.
4. Mr. Y. Das, learned senior counsel appearing for the petitioner submitted that pursuant to the order passed by this Court in the writ petition on 7.4,2004, the agreement dated 6.4.2008 entered into between the petitioner and the opp.party No. 2 got frustrated and the opp.party No. 2 demanded a sum of Rs. 6.5 lakhs towards cancellation/frustration of the agreement. The petitioner has already paid the demanded amount of Rs. 6.5 lakhs through Bank Draft drawn on ICICI Bank, document in support of which has been annexed to this petition.
Though the opp.party No. 2 entered his appearance through his counsel and initially contested the matter, but during the course of argument, the said learned Counsel submitted in Court that he haa no instructions to proceed with the case.
5. Mr. Y. Das, learned Counsel for the petitioner contended that the nature of the dispute, as is revealed from the record, itself clearly shows that the same is purely a civil dispute and no offence whatsoever has been made out under Section 420 IPC against the petitioner. He further contended that even accepting the entire allegation on its face value, no case under Section 420 IPC is made out against the petitioner and, therefore, no cognizance should have been taken on the said F.I.R. by the police. In that view of the matter, he submitted that the F.I.R. is liable to be quashed. In support of his contention, Mr. Das relied on-the decisions in the cases of Uma Shankar Gopalika v. State of Bihar and Anr. (2005) 10 S.C.C. 336, Veer Prakash Sharma v. Anil Kumar Agarwal and Anr. : 2007CriLJ3735 and Central Bureau of Investigation v. Ravi Shankar Srivastava, IAS and Anr. : 2006CriLJ4050 .
In the case of Uma Shankar Gopalika (supra), the Supreme Court has observed that it is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating.
In the case of Veer Prakash Sharma (supra), the Supreme Court referred to an earlier decision in the case of Hridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr. JT 2000(3) SC 604, wherein it was held as follows:
14. On a reading of the Section it is manifest that in the definition there are set forth two separate classes of acts which the 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.
15. In determining the question, it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to 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.
In the case of Central Bureau of Investigation (supra), the Supreme Court, while examining the powers of the Court under Section 482 of the Code of Cr.P.C. held, 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 are accepted in toto. It was further held therein that in exercise of the powers under Section 482 Cr.P.C. the Court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of the Court or quashing of the proceeding would otherwise serve the ends of justice.
6. Analysing the facts of the present case, in the touch stone of the decision of the Supreme Court in the case of Hridaya Ranjan Prasad Verma and Ors. (supra), it would be seen that the allegation made in the F.I.R. does not disclose a case of inducement with a fraudulent or dishonest intention of the petitioner. As held in the said decision, the distinction between mere breach of contract and the offence of cheating is a fine one which depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct, but for the 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. On analysis of the facts of the present case, it is clear that even if it is expected that there is a breach of contract, the same cannot amount to an offence of cheating as there is clear absence of any prima facie material to show that the said breach of contract was a consequence of a fraudulent or dishonest intention or that the informant was induced with such fraudulent or dishonest means to part with money. Applying the ratio of the decision in the case of Central Bureau of Investigation (supra) to the facts of the present case, it is seen that accepting the allegation made in the F.I.R. in toto, also does not make out an offence of cheating under Section 420 IPC and allowing continuance of the prosecution would amount to abuse of the process of Court and quashing the proceeding would otherwise serve the ends of justice.
7. In view of the above, this Court is of the opinion that the F.I.R. registered as Raghunathpalli P.S. Case No. 284 of 2006, upon which, G.R. Case No. 2316 of 2006 was registered and is pending before the learned S.D.J.M., Rourkela, is liable to be quashed for securing the ends of justice as the continuance of the said proceeding would amount to abuse of the process of the Court. The said F.I.R. is, accordingly, quashed and consequently, the proceeding in G.R. Case No. 2316 of 2006 is also quashed in its entirety.
The CRLMC is accordingly allowed.