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2017 (11) TMI 1980 - HC - Indian LawsCheating - real grievance of the second respondent commences after dropping the idea of construction of the proposed property and when the petitioners failed to return the advance amount of Rs. 1.5 Crores - whether the ingredients of Section 420 have been made out or not? - HELD THAT - The Hon ble Apex Court in a judgment in HRIDAYA RANGAN PD. VERMA AND ORS. VERSUS STATE OF BIHAR AND ANR. 2000 (3) TMI 1105 - SUPREME COURT OF INDIA had laid down the ingredients to constitute an offence under Section 420 to include deception of any persons; fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property; and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. It is clear from various judgements. whenever there are sufficient materials to indicate that a complaint manifestly discloses a civil dispute the inherent powers of this Court under Section 482 Cr.P.C. can be invoked. Likewise when the complaint prima-facie discloses that the transaction is for recovery of money due on a commercial transaction the police cannot be transformed into a collection agent by spicing a criminal colour to the complaint. There are no justification to permit the first respondent police to continue with the investigation - petition allowed.
Issues Involved:
1. Challenge to the FIR registered in Cr. No. 180 of 2016. 2. Determination of whether the transaction between the parties is civil or criminal in nature. 3. Examination of the ingredients of Section 420 IPC (Cheating). 4. Consideration of the offences of criminal breach of trust and misappropriation. Detailed Analysis: 1. Challenge to the FIR registered in Cr. No. 180 of 2016: The petitioners filed petitions challenging the FIR registered in Cr. No. 180 of 2016 dated 13.07.2016 and sought to quash the same. The FIR was registered based on a complaint by the second respondent alleging cheating under Section 420 r/w. 34 IPC. 2. Determination of whether the transaction between the parties is civil or criminal in nature: The petitioners argued that the entire transaction was civil in nature, involving a construction agreement for Rs. 4 Crores, and thus, no criminal act was involved. They emphasized that the dispute arose from a breach of contract, which should be addressed in a civil court. The second respondent alleged that the petitioners had taken advantage of her situation and cheated her by not returning the advance amount of Rs. 1.50 Crores. 3. Examination of the ingredients of Section 420 IPC (Cheating): The court examined whether the ingredients of Section 420 IPC were made out. The essential elements to constitute an offence under Section 420 IPC include: - Deception of any person. - Fraudulently or dishonestly inducing any person to deliver any property. - Intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived. The court found that: - The second respondent voluntarily engaged the services of the petitioners and entered into a construction agreement. - There was no evidence of false or misleading representation by the petitioners at the time of entering the contract. - The second respondent's decision to drop the property purchase was based on the petitioners' advice, which could have been given in good faith. - The petitioners acknowledged their liability and issued cheques for the amount, which were dishonored, leading to a statutory notice under Section 138 of the Negotiable Instruments Act. The court concluded that the ingredients of cheating, as defined under Section 415 IPC, were not made out since there was no dishonest inducement or deception by the petitioners. 4. Consideration of the offences of criminal breach of trust and misappropriation: The second respondent also alleged criminal breach of trust and misappropriation. The court examined Sections 403 (Dishonest misappropriation of property) and 405 (Criminal breach of trust) IPC, which require a dishonest intention for misappropriating the money. The court found that: - The construction agreement did not specify how the advance amount should be utilized. - The petitioners' use of the funds for personal liabilities did not amount to misappropriation. - There was no evidence of dishonest intention or entrustment of property by the second respondent to the petitioners. The court held that the complaint did not disclose the ingredients of dishonest intention, misappropriation, or entrustment, and thus, the offences of criminal breach of trust and misappropriation were not made out. Conclusion: The court, relying on various judgments, concluded that the dispute was purely civil in nature and did not constitute any criminal offence. Therefore, the inherent powers under Section 482 Cr.P.C. were invoked to quash the FIR. The petitions were allowed, and the investigation in Cr. No. 180 of 2016 was quashed.
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