BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT Dated: 08/04/2008 CORAM The HONOURABLE MR.JUSTICE S.PALANIVELU Crl.O.P.(MD)No.8930 of 2006 and M.P.(MD)Nos.2 & 3 of 2006 Rajeswari .. Petitioner Vs. The State rep. by it's Inspector of Police, Organized Crime Branch, Madurai .. Respondent Prayer This petition filed under Section 482 of Cr.P.C., praying to quash the final report in C.C.No.91 of 2006 pending on the file of the learned Judicial Magistrate No.1, Ramanathapuram. !For petitioner ... Mr.N.Dilip Kumar ^For Respondent ... Mr.A.Palaniswamy Addl.Public Prosecutor :ORDER
The factual matrix of the case is as follows:-
The petitioner is second accused in Crime No.12 of 2003, registered under
Sections 120B, 465, 468, 471 and 420 IPC on the file of the respondent Police.
The first accused in this case is one Narasimman, the husband of the petitioner.
He was working as Superintendent in the Office of the Superintendent of Police
in Ramanathapuram District. Both the accused had been running a Textile Shop
under the name and style of ‘Sri Rajarajeswari Textile Readymades’ and ‘Sri
Rajarajeswari Silk’ in Ramanathapuram. They desired to invest more money in the
said business for which they planned to gather money by propagating that they
would pay more interest for the money saved with them. By means of issuance of
saving cards, pro-notes and other categories of security they collected hefty
amounts. They also indulged in making the public believe that they would repay
the amount deposited by them with higher rate of interest. In this process,
they collected money from 24 persons on pro-notes to the tune of Rs.21,46,400/-.
But they had not returned back the money as promised.
2.Further, they also received money from six persons by supplying saving
cards to the value of Rs.2,74,366/-. Moreover, Rs.7,02,500/- was collected by
them from another six persons. They also obtained Rs.7,00,000/- from another
three persons by signing in the security papers but defaulted to repay. The
accused also got money to the tune of Rs.7,02,500/- from six persons as loan but
they did not repay to them. In addition to this, both of them promised certain
police personnel mis-representing that they would get loans from the Banks and
persuaded them to deposit the same with themselves and in that attempt, the
first accused issued pay certificates to nine Police Officials with false
particulars so as to get Rs.6,50,000/- from various Banks at Ramanathapuram
Taluk and appropriated the same by promising to pay higher rate of interest.
3.The learned counsel for the petitioner Mr.Dilip Kumar, would strenuously
contend that whatever be the allegations touching the alleged criminal
activities of the first accused could not be allowed to prejudice the petitioner
herein, since she had played no role in the alleged transactions. He further
states that the petitioner had no knowledge about the transactions. It is also
argued by him that the dispute covered by the criminal proceedings are of civil
in nature and no criminal offence is made out.
4.The Court heard the learned Additional Public Prosecutor as regards the
contentions put forth on behalf of the petitioner.
5.The learned counsel for the petitioner would gather support from various
decisions of the Hon’ble Supreme Court, in which the law has been laid down
providing guidelines to deal with the identical matters on this subject. He
garnered support from the decision of the Apex Court in Hridaya Ranjan Prasad
Verma and Others Vs. State of Bihar and Another reported in (2000 SCC (Cri)
786), in which Their Lordships have referred the principles laid down by the
Supreme Court in Bhajan Lal’s case reported in (1992 Supp(1) SCC 335):(State of
Haryana Vs. Bhajan Lal): (1991 SCC (Cri) 426), which are as follows:-
“102. (l) Where the allegations made in the first information report or the
complaint, even if they are taken at their face value and accepted in their
entirety do not prima facie constitute any offence or make out a case against
the accused.
(2) Where the allegations in the first information report and other
materials, if any, accompanying the FIR do not disclose a cognizable offence,
justifying an investigation by police officers under Section 156(1) of the Code
except under an order of a Magistrate within the purview of Section 155(2) of
the Code.
(3).Where the uncontroverted allegations made in the FIR or complaint and
the evidence collected in support of the same do not disclose the commission of
any offence and make out a case against the accused.
(4).Where, the allegations in the FIR do not constitute a cognizable
offence but constitute only a non-cognizable offence, no investigation is
permitted by a police officer without an order of a Magistrate as contemplated
under Section 155(2) of the Code.
(5).Where the allegations made in the FIR or complaint are so absurd and
inherently improbable on the basis of which no prudent person can ever reach a
just conclusion that there is sufficient ground for proceeding against the
accused.
(6).Where there is an express legal bar engrafted in any of the provisions
of the Code or the concerned Act (under which a criminal proceeding is
instituted) to the institution and continuance of the proceedings and/or where
there is a specific provision in the Code or the concerned Act, providing
efficacious redress for the grievance of the aggrieved party.
(7).Where a criminal proceeding is manifestly attended with mala fide
and/or where the proceeding is maliciously instituted with an ulterior motive
for wreaking vengeance on the accused and with a view to spite him due to
private and personal grudge.”
6.In order to consider the quashment of proceedings against the accused in
a criminal proceedings the court has to see whether the act of the complainant
or the police would come under any of the categories enumerated. As far as the
facts of the present case are concerned, the present case could be considered in
the light of category Nos.1&2 stated above. While the statement of witnesses
recorded under Section 161(3) Cr.P.C., have been scrutinized, it comes to light
that both the accused threw alluring promises to the witnesses either to pay
back the amount received from them with higher rate of interest or with some
other profits. The learned counsel for the petitioner in this context would
also state that the statement against this petitioner may not stand. The fact
could be ascertained only after appreciation of the oral evidence and this stage
is not an appropriate one to consider all those things.
7.It is worth mentioning to state that the accused made fascinating
assurances to as many as 41 witnesses, who have been arrayed as witnesses No.1
to 41 in the charge sheet, falsely representing that they would be monetarily
benefited. A reading of the First Information Report undoubtedly discloses
cognizable offences against the accused and the allegations are thoroughly
justifying the investigation by the Police Officers.
8.The learned counsel for the petitioner also placed reliance upon a
decision reported in 2003 SCC (Cri) 703 (Ajay Mitra Vs. State of M.P. and
Others) wherein the Hon’ble Supreme Court had an occasion to deal with the term
“mens rea” and the scope of Section 420 IPC. The operative portion in the
judgment goes thus:-
“16. A Guilty intention is an essential ingredient of the offence of
cheating. In other words “mens rea” on the part of the accused must be
established before he can be convicted of an offence of cheating. (See
Jaswantrai Manilal Akhaney Vs. State of Bombay). In Mahadeo Prasad Vs. State of
W.B. it was held as follows:- (AIR paras 4-5)
Where the charge against the accused under Section 420 in that he
induced the complainant to part with his goods, on the understanding that the
accused would pay for the same on delivery but did not pay, if the accused had
at the time he promised to pay cash against delivery an intention to do so, the
fact that he did not pay would not covert the transaction into one of cheating.
But if on the other hand he had no intension whatsoever to pay but merely said
that he would do so in order to induce the complainant to part with the goods
then a case of cheating would be established.
17. In Hari Prasad Chamaria v. Bishun Kumar Surekha it was held that
unless the complaint showed that the accused had dishonest or fraudulent
intention at the time the complainant parted with the money, it would not amount
to an offence under Section 420 IPC and it may only amount to breach of
contract. In G.V.Rao Vs. L.H.V Prasad it was reiterated that guilty intention
is an essential ingredient of the offence of cheating and, therefore, to secure
conviction “mens rea” on the part of the accused must be established. It has
been further held that in order to constitute the offence of cheating, the
intention to deceive should be in existence at the time when the inducement was
offered.”
9.In another Apex Court decision cited by the learned counsel for the
petitioner the following principles have been formulated. In Anil Mahajan Vs.
Bhor Industries Ltd., and Another reported in (2006 1 SCC (Cri) 746), it is
ruled thus:-
“6. ….Reliance has been placed, in that order, on various decisions of
this court holding that from mere failure of a person to keep up promise
subsequently, a culpable intention right at the beginning, that is , when he
made the promises cannot be presumed. A distinction has to be kept in mind
between mere breach of contract and the offence of cheating. It depends upon
the intention of the accused at the time of inducement. The subsequent conduct
is not the sole test. Mere breach of contract cannot give rise to criminal
prosecution for cheating unless fraudulent, dishonest intention is shown at the
beginning of the transaction.”
10.It is in the words of Hon’ble Supreme Court, mere use of the expression
‘cheating’ in the complaint is of no consequence. The criminal intention on the
part of the accused should be inferred on perusal of the allegation in the First
Information Report. When the case on hand is taken for consideration, the First
Information Report and the statements recorded under Section 161(3) Cr.P.C would
very well disclose sufficient allegation, which would prima facie show that the
offences under provisions of IPC are made out.
11.It is well settled that every breach of contract would not give rise an
offence of cheating and only in those cases breach of of contract would amount
to cheating where there was deception played at the very inception. If the
intention to cheat was developed later on, the same does not amount to cheating.
Saying the said words, the learned counsel for the petitioner contends that in
the present case, the criminal intention on the part of the accused could not be
inferred at the inception of the alleged transaction. As far as the settled
principles, the mala fide intention in the minds of the accused at the earliest
point of time in the transaction alleged is a condition precedent to bring them
under Section 420 IPC. The said principle was already laid down by the Supreme
Court in Hira Lal Hari Lal Bhagwati Vs. CBI, New Delhi reported in (2003 SCC
(Cri) 1121). The learned counsel for the petitioner would rely upon the decision
in Uma Shankar Gopalika Vs. State of Bihar and another reported in (2006 2 SCC
(Cri) 49) in which Their Lordships have held as follows:-
“7. In our view petition of complaint does not disclose any criminal
offence at all much less any offence either under Section 420 or Section 120-B
IPC and the present case is a case of purely civil dispute between the parties
for which remedy lies before a civil court by filing a properly constituted
suit. In our opinion, in view of these facts allowing the police investigation
to continue would amount to an abuse of the process of court and to prevent the
same it was just and expedient for the High court to quash the same by
exercising the powers under Section 482 Cr.P.C., which it has erroneously
refused”
12.Following the dictum laid down in the above said decision, while the
circumstances in the present case are taken into account, the First Information
Report itself is very clear to discern necessary mens rea in the minds of the
accused from very beginning. To further state, the statement of witnesses are
also available in such a way to show that even at the inception of each
transaction, both the accused had conducted themselves in a way with deceitful
intention to get enriched with ill-gotten money.
13.Following the well nigh settled principles of Supreme Court, on the
facts of the case, it ought to be held that the petitioner is not at all
entitled to get quashment of the proceedings. The principles contained in the
decisions relied upon by the petitioner would not come to her rescue, since she
had acted along with the first accused with identical criminal intention of
deceiving the witnesses. If one or two occasions are available then the Court
may consider that it may be of civil in nature but ‘mens rea’ on the part of the
accused could be inferred in numerous transactions involving hefty amount of
money, which depicts the avaricious desire entertained by the accused in amazing
wealth by unlawful means. Such trend in the Society shall be discouraged.
Before this Court on 16.11.2007 it was reported that the trial already commenced
before the trial Court and 17 witnesses were examined on the side of prosecution
out of 20 witnesses cited in the charge sheet. The case is in part-heard stage
before the trial Court and quashing of proceedings in this stage would be
inappropriate. Further, no appreciable grounds are also available in favour of
the petitioner for quashing the criminal proceedings. The case has to see its
logical end. The petition does not merit any consideration, which deserves
dismissal. The observations made in this order will not in any way prejudice
the merits of the case.
14.In fine, the petition is dismissed. Consequently, the connected
miscellaneous petitions are also dismissed.
Mpk
To
1.The Judicial Magistrate No.1,
Ramanathapuram.
2.The Public Prosecutor,
Madurai Bench of Madras High Court,
Madurai.