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2014 (2) TMI 1414 - HC - Indian LawsDishonor of Cheque - insufficient of funds - dishonest or fraudulent intention on the part of the petitioner at the time of taking the loan or not - civil dispute or criminal offence - offence under Section 420 IPC - HELD THAT:- The principles that have emerged are that in order to sustain a plea of offence under section 420 IPC, the complaint has to show that the accused had dishonest or fraudulent intention at the time the complainant had parted with the property or that the accused by making a representation at or before the time the complainant had parted with property, deceived the complainant and thereby induced the complainant to deliver property and that the accused knew such representation to be false - When allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of culpable intention at the time of making initial promise, no offence under section 420 IPC can be said to be made out. It appears from the complaint petition that the petitioner and the complainant had shared a friendly relationship for a long time. The petitioner was in need of Rs. 8 lakhs and he requested the complainant to give him a loan for the said amount. Because of the friendship and bona fide need, the complainant advanced the loan to the petitioner on the understanding that loan will be repaid on or before 12.3.2010 and in token of the assurance and promise, the petitioner also issued one cheque for Rs. 8 lakhs. The complainant had deposited the cheque after 12.3.2010 and the same came to be dishonoured for insufficiency of fund - It appears that the petitioner did not harbour any apprehension that the complainant will not pay the amount and that also perhaps explains why he had not initiated proceeding under Negotiable Instruments Act, 1881 and why he had agreed for re-payment of the loan amount on instalment of Rs. 50,000/- per month. As such, no averment or allegation in the complaint was made that there was any fraudulent or dishonest intention on the part of the petitioner at the time of taking of the loan. From the averments made in the complaint petition and the initial deposition of the complainant, where the complainant only says that accused did not repay the loan as per promise made despite his many requests and as the accused finally refused to re-pay the loan, he had filed the complaint, it appears to me that the dispute between the parties is purely of civil nature arising out of breach of contract. Subsequent refusal to pay the balance amount does not satisfy the ingredients of cheating inasmuch as dishonest intention at the time of initial transaction is lacking. An offence of cheating would be constituted when the accused had fraudulent or dishonest intention at the time of making promise or representation. Petition allowed.
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