TMI Blog2017 (8) TMI 1703X X X X Extracts X X X X X X X X Extracts X X X X ..... ey - This Court in Arun Bhandari v. State of Uttar Pradesh and Ors. [ 2013 (1) TMI 1049 - SUPREME COURT ], has held that it is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. The Chief Judicial Magistrate while rejecting the application of the Appellant for seeking discharge has not even referred to any allegation or evidence on the basis of which it can be said that ingredients of Section 420 Indian Penal Code were made out in the facts of the present case - in the present case ingredients of Section 420 Indian Penal Code were not made out so as to frame any charge Under Section 420 Indian Penal Code against the Appellant. The order of the Chief Judicial Magistrate dated 28.02.2007 and the judgment of the High Court dated 21.10.2016 are set aside. The Appellant shall stand discharged from the charges Under Section 420 Indian Penal Code - Appeal allowed. - Criminal Appeal No. 1541 of 2017 (Arising out of SLP (Crl.) No. 2320 of 2017) - - - Dated:- 25-8-2017 - Hon'ble Judges A.K. Sikri and Ashok Bhushan, JJ. For A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tehpur against the Chairman of the Company/Proprietor and Managing Director of the Company praying for realisation of the amount deposited in June/July, 1997 along with interest and Rs. 2000/- as expenditure of the litigation. The complaint was filed on 09.11.1998. 4. The Police carried out investigation in Criminal Case No. 386 of 1998 recorded the statement of Respondent No. 2 and his wife and a chargesheet No. 358 of 2001 dated 14.10.2001 was submitted by the Police Under Section 420 Indian Penal Code. The cognizance was taken on 15.02.2002. The Appellant filed an application for discharge alleging that neither sufficient allegations are made nor evidence to prosecute the Appellant Under Section 420 Indian Penal Code was produced. Chief Judicial Magistrate rejected the application for discharge vide his order dated 28.02.2007 against which Criminal Revision was filed by the Appellant in the High Court. The Criminal Revision has been dismissed on 21.10.2016 against which order this appeal has been filed. 5. We have heard Shri Pradeep Kant, learned senior Counsel appearing for the Appellant and learned Counsel for the State of U.P. 6. Although, notices were published in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give the receipt of the same with his signature it was also assured that the money of the applicant will not be lost this and all responsibility will be on him. Along with him his son Samir Sahay Advocate who was already acquainted with the applicant also accompanied his father. Major PC Sahay gave the above said assurance, and the applicant and his wife Smt. Uma Devi deposited Rupees one Lakh with Major P.C. Sahay in this regard and he gave the receipt of the same to the applicant of which the applicant is enclosing the photocopy. Like this Major P.C. Sahay (retired) has got deposited total amount of Rs. 86,000/- from me and my wife (4) But after some days it came to know that the said company has ran away along with the lakhs of rupees of the depositors after closing its office. I personally went and found the office closed. (5) I met with Major P.C. Sahay (retired) and his son Samir Sahay they denied their responsibility and said that due to loss the company has been closed. (6) In this way the owner of company Aneja Group Major P.C. Sahay (retired) Regional Manager and his son Samir Sahay have committed forgery by giving false assurance to the depositors and caused loss to them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Company, he would take the entire responsibility. It was further stated that the Appellant accompanied his father Major P.C. Sahay (Retd.) who was known to Respondent No. 2. 14. The application was filed by the Appellant seeking discharge on the ground that there are no evidence to frame charge Under Section 420 Indian Penal Code. Learned Chief Judicial Magistrate while rejecting the application filed by the Appellant for discharge has observed that on the assurance of both Major P.C. Sahay (Retd.) and the Appellant, the complainant and his wife deposited Rs. 86,000/-. Learned Chief Judicial Magistrate has given following reasons for rejecting the application: It has been clearly mentioned in the F.I.R. that after the assurance of deceased P.C. Sahay and his son Samir Sahay the money was invested in the Company. As well as it has also been mentioned that Accused Samir Sahay was receiving commission from the Company after perusing all the evidence in the file as per law there is proof to frame allegation against Accused Samir Sahay. 15. The order passed by the Chief Judicial Magistrate was challenged. The High Court by-brief order has dismissed the revision observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived 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 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. 19. Again in Dalip Kaur and Ors. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as noted above, it is clear that ingredients of Section 420 Indian Penal Code are not made out in the present case, either from the First Information Report or from any other material. From the First Information Report as extracted above only allegation made against the Appellant was that he accompanied his father Major P.C. Sahay (Retd.) when he assured that the money of the applicants will not be lost and it shall be the responsibility of his father (late P.C. Sahay). Following allegations made in the First Information Report need to be specially noticed: Along with him his son Samir Sahay Advocate who was already acquainted with the applicant also accompanied his father. Major PC Sahay gave the above said assurance, and the applicant and his wife Smt. Uma Devi deposited Rupees one Lakh with Major P.C. Sahay in this regard and he gave the receipt of the same to the applicant of which the applicant is enclosing the photocopy. Like this Major P.C. Sahay (retired) has got deposited total amount of Rs. 86,000/- from me and my wife (4) But after some days it came to know that the said company has ran away along with the lakhs of rupees of the depositors after closing its office. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deceive should be in existence at the time when the inducement was offered. 23. In S.W. Palanitkar v. State of Bihar, 2002 (1) SCC 241, it has been laid down that; (SCC p. 250, para 21) 21..... 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. 24. In the said case while dealing with the ingredients of criminal breach of trust and cheating, the Bench observed thus: (S.W. Palanitkar case, SCC p. 246, paras 9-10) 9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property, (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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