ORDER
Vaman Rao, J.
1. These two Criminal Petitions have been filed under Section 482, Cr.P.C. for quashing the proceedings in Crime No. 144 of 1999 on the file of Narayanaguda police station. The petitioner in Crl. P. No. 2776/99 is the accused No. 1 and the petitioner in Crl. P. No. 2064 of 1999 are accused Nos. 2 to 4 in the said first information report.
2. It appears that the de facto complainant filed a complaint under Section 200, Cr.P.C. before the XVII Metropolitan Magistrate, Hyderabad who referred the matter under Section 156(3), Cr.P.C. to Narayanaguda police for investigation. The contention of the learned counsel for the petitioner is that a reading of the complaint would disclose that the dispute between the accused and the de facto complainant is purely of civil nature inasmuch as the de facto complainant has advanced a loan to the accused No. 1 which was not repaid. The counsel further contended that the ingredients of the offence of cheating as defined under Section 145, I.P.C. are not spelled out and as such no offence under Section 420, IPC is made out. The first information report recorded on the basis of the complaint forwarded to the police mentions the offences under Sections 419, 420 and 425, I.P.C. Obviously the offence under Section 425, I.P.C. is not attracted as there is no allegation in the complaint in respect of any mischief. The contention of the learned counsel for the petitioner is that the transaction between the accused and the de facto complaint is of a simple straight forwarded loan and simply because the accused allegedly failed to repay the loan in itself does not constitute an offence of cheating as defined under Section 415, I.P.C.
3. The learned Public Prosecutor, on the other hand, contends that the allegations in the complaint disclose that it was not a straightforward loan transaction but the de facto complainant was induced to advance the loan because of fraudulent misrepresentation by the accused. It contains the following allegations :
(1) that the accused has been running a shop called M/s. Nutan Kirana and General Stores in Himayath Nagar.
(2) that in fact it was established by the father of the accused about 40 years back.
(3) As accused No. l’s father became old, in the partition the accused No. 1 got the said shop and it is his shop and he has been running it independently since last many years.
The complainant was a regular customer of accused No. 1 who introduced the complainant to the other accused. Further the allegation is that the accused with a preplan, and motive approached the complainant in the month of Sept. 1996 and misrepresented before him that the shop belongs to the first accused and their properties have been partitioned and as the third accused became very old he could not do anything and has been staying with him. It is stated that trusting the accused, the complainant gave an amount of Rs. 3 lakhs on different dates in the month of Sept. 1996 and the first executed two documents in favour of the complainant. It is further alleged that subsequently the complainant doubted the activities of the accused and when he approached them to reassure what they earlier representated to him. It is further stated that after some time the first accused to show that he was the proprietor of the shop and handed over a cheque for an amount of Rs. 30,000/- on account No. 401 at Sangli Bank, Hyderabad Branch. At the request of the accused No. 1 this cheque was not presented for encashment. On demand made by the de facto complainant the first accused issued another cheque on 4-2-1999 and the same was returned unpaid, and the notices issued have been returned and the complainant is preferring a complaint under Section 138 of the Negotiable Instruments Act separately. It is then stated that the accused No. 1 has been absconding since forty days and surprisingly the other accused herein opened shop and are doing business. It is thus stated that the accused with a preplan cleverly cheated the complainant for an amount of Rs. 3 lakhs and in order to cheat the public stating that the shop belongs to them only. The third accused is said to have filed a suit against the complainant.
4. Normally a transaction of a loan between a creditor and a debtor cannot be considered as satisfying the requirements of the ingredients of the offence under Section 415, I.P.C. merely on the ground that the loan obtained was not repaid. Section 415, I.P.C. which defines cheating may be extracted.
Whoever, by deceiving any person, fraudulently or dishonestly, induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage, or harm to that person in body, mind, reputation or property, is said to “cheat”.
5. From the facts alleged in the complaint, the first limb of Section 415, I.P.C. is attracted. For constituting an offence of cheating under the first limb the following ingredients must be satisfied.
(1) the person complaining of cheating was deceived by the accused.
(2) by deceiving, the accused fraudulently or dishonestly induced the person so deceived to deliver any property to any person or to consent that any person shall retain any property or
(3) intentionally induced that person to do or omit to do anything which he would not do or omit if he were not so deceived which act or omission causes or is likely to cause damage or harm to that person in body, mind reputation or property.
Here, deceiving connotes causing to believe something which is false. It may also amount to misleading on a question of fact or leading some one into an erroenous belief about a fact. The word “fraudulently” has been defined in Section 25, I.P.C. as under:
A person is said to do a thing fraudulently if he does that thing with intent to defraud but no otherwise.
The words “fraud” and “defraud” have not been defined in the Indian Penal Code. Whenever a fraud is alleged or an act is alleged to have been done fraudulently it connotes at least two elements. Firstly there must be a deceit or an intention to deceive. Deception can be practised by some overt act, representation or conduct or in some cases by the deliberates suppression of something or maintaining mere secrecy. The second element is, there must be either actual injury or possible injury or intention to expose a person either to actual injury or to a risk of possible injury by means of deceit of secrecy. One of the practical tests as to the fraudulent character of a deception for the purpose of criminal law is, did the person who practised the deceipt derived any advantage from it which could not have been had if the truth had been known. It is obvious therefore that if the author of deception received avantage there must be an equivalent loss or risk of loss to the person on whom the fraudulent deception was practised. In the normal business transactions people do not normally deceive each other intentionally except when a fraudulent purpose is sought to be achieved. Thus the expression “defraud” involves elements of deceit and injury to the person deceived. Even if in a certain case an advantage gained by the person deceiving does not result in any corresponding loss to the person deceived the second condition is satisfied. Where an accused intended to obtain an advantage to himself, there is fraud.
6. The word “dishonestly” has been defined in Section 24 of I.P.C. as under :
Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing “dishonestly.
Thus for satisfying the ingredients of the offence under the first limb of Section 415, I.P.C. the prosecution would be required to show that the accused practised deception on the de facto complainant. In other words, the accused should have made a representation in respect of a certain fact which is false. The accused then should have fraudulently or dishonestly induced the de facto complainant to deliver any property to any person or consent that the person shall retain any property.
7. It was argued by the learned counsel for the petitioner that in this case, there was no deception and there was no fraudulent or dishonest inducement of the de facto complainant on the part of the accused.
8. While it is true as stated above, the debtor who having obtained loan from a creditor failed to repay that loan, cannot be said to have committed any offence of cheating simply on the basis that he failed to repay that loan. But it cannot be postulated as a matter of Jaw that in a loan transaction there can never be any element of offence of cheating, A false representation in respect of certain facts which are false to the knowledge of the person seeking loan particularly in respect of his status and his capacity for repayment may amount to practising of deception. If by practising such deception, the loanee has fraudulently and dishonestly induced the creditor to advance the loan this would amount to satisfying the second ingredient of the offence as analysed above. As seen above, the requirement of fraudulent intention would be satisfied if it is shown that there was deceit and injury to the person deceived. As stated above, the test is whether the author of the deceit derived any advantage. In a loan transaction assuming other ingredients are present it is obvious that if loan is secured by practising deceit, the author of deceit would gain advantage, of securing the loan which he would have been unable to secure if the truth had been known. The requirement as to dishonest inducement would be satisfied inasmuch as securing of loan which a person could not have otherwise secured could be construed as wrongful gain and from the point of view of the creditor it may amount to wrongful loss as but for fraudulent deception he would not have advanced the loan. Thus it is possible in a given case that in securing loan from a creditor there may be circumstances and elements which might satisfy the requirement of ingredients of the offence of cheating. It depends on the specific circumstances of the case. In this case there is a broad allegation that not only the accused No. 1 but the other accused made a representation and induced the de facto complainant to believe that A. 1 was the exclusive and solitary owner of the shop which he was running. This representation, according to the allegation in the complaint, was sought to be further strengthened by stating that A1 got the shop in the partition of family properties. There is an averment that trusting accused No. 1, the de facto complainant gave the amount of Rs. 3,00,000/- to him and got two documents executed by him. There is also an allegation that all the accused did this with a pre-conceived plan. There is an averment that subsequently the complainant doubted the activities of the accused but he was again assured by the accused that what they stated to him earlier was true. According to the complainant, however, subsequently after the cheques issued by accused No. 1 bounced the accused No. 1 had been absconding. The allegation in the complaint is that during this period, the other accused as per their previous plan have opened the shop and started doing business in that shop. They represented to the public that the shop belongs to them only. Thus, the sum and substance of the allegation in the complaint is that all the accused represented to the complainant that the shop belongs to accused No. 1. It is on the basis of this representation that the de facto complainant got the documents executed only from the accused No. 1 and advanced loan. Subsequently, the accused have been representing that the shop belongs to the accused other than accused No. 1. Therefore, it is not a case where it can be said that the transaction in this case is a straightforward loan transaction without attracting any ingredients of the offence of cheating as defined under Section 415 of I.P.C.
9. It is true that all the ingredients of the offence as defined under Section 415 of I.P.C. might not have been stated elaborately in the complaint. It may be mentioned that in such matters, it is the evidence about the surrounding circumstances which becomes crucial. Considering these circumstances, on the basis of the allegation in the complaint it is not possible to hold that no ingredients of the offence of cheating as defined under Section 415 of I.P.C. are made out. It is not a case where there is absolute lack of any allegations which may satisfy the definition of the offence of cheating as contemplated under Section 415 of I.P.C. It is not a case where on a reading of the complaint, the proceedings against the petitioners could be directed to be quashed.
10. In the result, these petitions are dismissed. However, the observations in this order have been made strictly for the purpose of disposal of these two petitions and they are not meant to be comments on the question of facts involved in the case. It is for the trial Court to go into all the relevant questions of fact during the trial.