The Bench of Justice Sanjay Dhar of the High Court of J&K and Ladakh while deciding two clubbed petitions under Section 482 of the Code of Criminal Procedure (hereinafter referred to as “CrPC”) deliberated upon the constituents of the offence of cheating as defined under Section 415 of the Indian Penal Code (hereinafter referred to as “IPC”) and deprecated the practice of trying to settle civil disputes between parties by taking resort to criminal proceedings.
The Court was dealing with a matter wherein upon an application filed by the Private Respondents before the Court of Chief Judicial Magistrate, Pulwama under Section 156(3) of CrPC, an FIR came to be registered against the Petitioners under Sections 420 and 506 of the IPC, and it was this FIR that was under challenge before the High Court.
In the complaint under Section 156(3) CrPC, the Complainant-Private Respondent had alleged that a deal was struck between the petitioners and private respondents with respect to landed estate measuring 12 Kanals and 02 marlas situated at Lasjan on the right side of the Bypass, for which the private respondent had already paid an amount of Rs.1.03 crores to the petitioners and issued cheques worth Rs.60.00 lacs, however, after receiving a substantial amount the Petitioners turned greedy and started resiling from the agreement which they had executed with the private respondents.
As per the stand of the Petitioners before the High Court, the owner of the land in question, petitioner did not execute any agreement to sell with the private respondents neither did he authorize the person who claiming to be the cousin of said petitioner had entered into the alleged agreement with private respondent, to execute any agreement on his behalf in respect of the land in question. Moreover, it was contended that the dispute between the parties is purely of civil nature and the private respondents are trying to give it a criminal color by filing the application under Section 156(3) and the resultant impugned FIR.
On the other hand, the Private Respondents while placing on record some transactions allegedly with respect to the sale of the land in question, contended that merely because they have filed a civil suit against the petitioners does not mean that the criminal proceedings should be quashed, and that once it is shown that a criminal offence is made out against the petitioners, the investigating agency should be allowed to investigate all aspects of the case and that the prosecution cannot be quashed at its inception.
Considering the case set-up by the parties as well as the Case Diary, the Court in order to decide the controversy delved into the question as to whether the allegations levelled by the private respondents against the petitioners in the impugned FIR would constitute an offence of cheating as defined in Section 415 of IPC, and while relying upon the language of the Section as well as various pronouncements of the Supreme Court, observed, “From the aforesaid analysis of law on the subject, it is manifestly clear that the offence of cheating is made out if there was fraudulent or dishonest intention at the very inception of a transaction i.e. at the time when promise or representation was made. Thus, for establishing an offence of cheating, the complainant is required to show that the accused had fraudulent intention at the time of making promise or representation.”
Applying the said principle to the case, the Court noted that it is as per the own case of the private respondents that greed prevailed upon the Petitioners later on, after they received a substantial amount and they have nowhere in their application under 156(3) CrPC alleged that the petitioners had dishonest or fraudulent intention at the time of entering into transaction with them, holding thereby that thus, “the most vital ingredient of the offence of cheating is missing in the present case”.
Moreover, the Court held that the dispute between the parties, if any, is purely of a civil nature in respect of which the private respondents have already filed a civil suit against the petitioners before the Civil Court, which is an admitted fact. Therefore, rejecting the contention of the private respondents, the Court observed, “There can be no quarrel with the legal position that same set of facts can give rise to both a criminal action and an action of civil nature but before taking recourse to a criminal action, it has to be shown that the allegations made in the FIR/complaint coupled with the material collected by the investigating agency during investigation of the case discloses commission of a criminal offence.”
The Court in this regard further observed, “There being no material to show any direct transaction between the petitioners and the private respondents, it cannot be stated that the petitioners made any representation, fraudulent or otherwise, to the private respondents. Even otherwise, as already noted, the allegations made in the impugned FIR, even if taken to be true, do not show that intention of the petitioners was fraudulent from the very inception.”
Finally, the Court while allowing both the petitions and quashing the impugned FIR as well as the proceedings emanating therefrom held, “in the instant case no criminal offence is even, prima facie, disclosed against the petitioners. The dispute, if any, between the petitioners and the private respondents is purely of a civil nature which the private respondents are intending to convert into a criminal prosecution”.
Furthermore, the Court, relying upon various Supreme Court Judgments took a serious note of the attempts of parties to convert civil disputes into criminal proceedings, and deprecated such conduct while holding that allowing the criminal proceedings to go on in the case of present nature would encourage the people to settle matters of civil nature by taking resort to criminal proceedings which is impermissible in law.
