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Ravindra C. Mehta Vs. Musta HuseIn Karam HuseIn and anr. - Court Judgment

LegalCrystal Citation
Subject;Criminal
CourtGuwahati High Court
Decided On
Judge
AppellantRavindra C. Mehta
RespondentMusta HuseIn Karam HuseIn and anr.
Prior history
R.A. Mehta, J.
1. The petitioner accused being aggrieved by the process issued by the learned Metropolitan Magistrate, 7th Court, Ahmedabad in Criminal Case No. 356/82 for an offence punishable under Section 420, I.P.C. has moved this Court under Section 482, Cr. P.C. for quashing the process on the ground that no offence of cheating is prima facie disclosed.
2. The complaint alleges that the petitioner who is doing the business of coke and coal in the name of Selected Coal Company and his bro
Excerpt:
- - from the report it will appear that on dishonour of a cheque if the complainant made a demand of money, it would be a case of civil liability and the ingredients of section 415 would not be satisfied merely because the cheque was dishonoured......return of the cheque and again he was assured that he would be paid cash and on 15th dec. 1981 the accused (complainant) was paid rs. 2500/- in cash and on 16th dec. 1981, rs. 1000/- in cash was paid and was assured that the remaining amount would also be sent soon. thus the petitioner got only rs. 5900/- against the promised payment of price of rs. 37,702. 12 ps. it is further alleged that the accused has thereafter bluntly refused the balance payment it is alleged that the accused had right from the beginning ill-intention of deceiving the complainant and had no intention to make full payment of the price of the goods taken on credit. it is also alleged that the brother of the complainant has also been similarly deceived to the tune of rs. 71,038/- in respect of the price of the coal.....
Judgment:

R.A. Mehta, J.

1. The petitioner accused being aggrieved by the process issued by the learned Metropolitan Magistrate, 7th Court, Ahmedabad in Criminal Case No. 356/82 for an offence punishable under Section 420, I.P.C. has moved this Court under Section 482, Cr. P.C. for quashing the process on the ground that no offence of cheating is prima facie disclosed.

2. The complaint alleges that the petitioner who is doing the business of coke and coal in the name of Selected Coal Company and his brother Mohmad Yasim Karamhussain also does the same business in the name of A. Star Coal Depot. Both of them have one common office. The accused is the Managing Director of Bhalkiya Mills Ltd. The complainant has been supplying the coal to different Mills in Ahmedabad as per their orders. It is alleged that the petitioner accused had promised payments of the price of the coal within 15 days and on that assurance the complainant was induced to act and deliver the coal to the Mill Company on 9th and 10th Sept. 1981 of the value of Rs. 37,702.12 ps. and bill for that amount was given to the petitioner on 10th Sept. 1981.

3. It is further alleged that the payment was not made within 15 days as promised and the complainant had to remind and had to make futile approaches and the accused used to give promises and on 25th Nov. 1981 a sum of Rs. 2400/- was paid in cash and the accused had asked the complainant to collect a cheque after a few days and thereafter a cheque dt. 8th Dec. 1981 for Rs. 15,000/- was given to the complainant. However, that cheque was returned unpaid by the bank on 10th Dec. 1981 with the remark 'refer to drawer'. Again the complainant met the accused and informed him about the return of the cheque and again he was assured that he would be paid cash and on 15th Dec. 1981 the accused (complainant) was paid Rs. 2500/- in cash and on 16th Dec. 1981, Rs. 1000/- in cash was paid and was assured that the remaining amount would also be sent soon. Thus the petitioner got only Rs. 5900/- against the promised payment of price of Rs. 37,702. 12 ps. it is further alleged that the accused has thereafter bluntly refused the balance payment It is alleged that the accused had right from the beginning ill-intention of deceiving the complainant and had no intention to make full payment of the price of the goods taken on credit. It is also alleged that the brother of the complainant has also been similarly deceived to the tune of Rs. 71,038/- in respect of the price of the coal sold on credit and his brother is also going to file a separate complaint It may be mentioned that the complainant is not in a position to state that even after lapse of two years whether his brother had filed the complaint or not. On behalf of the petitioner accused it is stated that the petitioner has not been served with any process and he has no knowledge about such complaint of the brother of the complainant.

4. Thus in substance the case of the complainant is that he has been intentionally deceived by the accused petitioner and the accused has by deceiving the complainant fraudulently and dishonestly induced the complainant to deliver the coal and thereby caused damage and harm to the complainant in property. In this connection, the complainant has also relied on the illustration (f) to Section 415, I.P.C. That illustration reads as under:

(f). A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby, dishonestly induces Z to lend him money. A not intending to repay it. A cheats.

From the definition of the offence of cheating in Section 415 and the illustration (f) on which complainant relies, it is clear that the crucial and material ingredient of offence is criminal intention 'fraudulently or dishonestly' and 'intentionally deceiving...and thereby dishonestly induces'. It is this criminal intention which makes the difference between a crime and a civil dispute. 'Criminal intention' is a state of mind of the accused and there may not be any direct evidence of such state of mind of the accused. When a person buys goods on credit and promises the payment and does not keep the promise, it may at first sight indicate that he is not a person of honest dealings and non-payment by him might indicate his dishonest intention. However, mere non-payment would not necessarily make it dishonest. Mere subsequent non-payment would require the examination of other attendant circumstances. It would be for the complainant to allege and point out such attendant circumstances from which the Court can raise an inference that if those circumstances are proved, a reasonable inference can be raised regarding the criminal intention of the accused. In every case of sale of goods on credit, there would be an assurance of payment and inducement to deliver property and actual delivery of property and nonpayment within stipulated time or reasonable time would result in wrongful loss to the complainant and the wrongful gain to the accused However, these circumstances of every sale on credit would hot make every such transaction an offence of cheating unless there are further circumstances from which the Court can raise an inference of criminal intention of the accused.

5. The learned Counsel for the complainant has pointed out that this was the first transaction between the parties and the accused bluntly refused to make payment of the balance amount and it is further alleged that his brother has also been similarly cheated and thus there are circumstances which go to show that the inference of dishonest intention necessarily arises in this case and the learned Magistrate was justified in issuing the process and the High Court ought not to interfere with the order of issuance of process and has referred to the Supreme Court judgments reported in the case of Hareram Satpathy v. Tikaram Agarwala : 1978CriLJ1687 and State of West Bengal v. Swapan Kumar Guha : 1982CriLJ819 and contended that the jurisdiction of the High Court to interfere with the order of issuing the process is restricted and very limited and the High Court cannot launch on a detailed and meticulous examination of the case on merits and set aside the order of the Magistrate directing issue of process.

6. In the above light let us consider the circumstances of this case. Admittedly, the goods were sold and delivered on credit to the Mills Company of which the accused is the Managing Director. Even though it is alleged that the payment was to be made within 15 days no payment was made for nearly 21/2 months and yet the complainant did not feel deceived or cheated and on 25th Nov. 1981 he accepted a cash payment of Rs. 2500/- and further payment by cheque after a few days. After about two weeks from 8th Dec. 1981 he accepted a cheque of Rs. 15000/- even though his dues were nearly Rs. 35,000/-. Even this cheque was returned unpaid on 16th Dec. 1981. On 15th and 16th Deo 1981 the Mill company paid the sum of Rs. 2500/- and Rs. 1000/-respectively in cash. More than two months thereafter the present complaint was filed on 25th Feb. 1982. From these circumstances it is clear that it cannot be said that the accused and the Mill Company had no intention of making the payment of the goods taken on credit. It is true that merely because the complainant accepted part payments every creditor is bound to accept whatever payment he receives it cannot be said that no offence is committed. But these payments from time to time do indicate that there was an intention to make the payments.

7. In the case of Mehsinbhai Fateali v. Emperor (1932) ILR 56 Bom204 : 1932-33 Cri LJ 401, following observations are made on pages 207 and 208 : (of ILR 56 Bom): (at P. 402 of Cri LJ):

The case is one, I think of considerable importance to merchants, because if a man carrying on a retail trade orders goods from his wholesaler and then becomes insolvent before he is able to pay for them. It is a very serious matter if from that circumstances alone, viz. that he could not and did not pay for the goods, the Court is to infer that he had a dishonest intention when he ordered the goods so that he is liable to be prosecuted for cheating. In almost every case in which a trader becomes insolvent, he has made a struggle against that fate. A man who is in embarrassed circumstances is not bound to disclose all his circumstances to people with whom he deals on credit. If he were, he could never get any credit. He is not entitled of course to make any untrue statement. If any question is put to him, he must answer truthfully; if he does not there is a clear case of cheating. But in this case it is not suggested that he was asked any question or made to the complainant any false representation.

Now under Section 415, which defines cheating, there must be deceit of the person cheated whereby he was fraudulently or dishonestly induced to deliver property. That is the only material part of the section for the purposes of this case...I think that if a person orders goods on credit, and promises expressly or impliedly to pay for them on a particular date, then if the prosecution proves that at the date of the contract the circumstances of the accused were such that he must have known that it was practically impossible that he would be able to pay for the goods, there would be a case of cheating.

8. In the present case it is impossible to infer from all the averments in the complaint that accused had dishonest intention when he purchased the goods on credit so that he is liable to be prosecuted for cheating. There is no circumstance shown in the complaint which goes to show that the circumstances of the ' accused and the Mill Company were to the knowledge of the accused such that he must have known that it was practically impossible that he would be able to pay for the goods or that for any other reason he had no intention to pay for the goods. It is not sufficient to cleverly draft the complaint in the language of the section and to include all the ingredients of the offence. The complainant must disclose the circumstances from which the Court can prima facie raise an inference of criminal intention of the accused. It is not for the complainant to make averment regarding his belief and his opinion. But the complainant must narrate the circumstances from which the Court can raise a prima facie inference regarding criminal intention of the accused to satisfy the Magistrate to form an opinion for taking cognizance of offence that there is sufficient ground for proceeding against the accused (Section 204, Cr. P.G).

9. The learned Counsel for the petitioner has referred to the judgment of this Court in Criminal Misc. Appln. No. 2176 of 1983 decided on 17th Jan. 1984, (Reported in (1984) 1 Crimes 844) delivered by Mr. Justice Ravani It was also a case of sale of goods on credit worth Rs. 57,511/- and the complaint was filed after about one year of the transaction and the Court held that it was a claim of the civil nature and the offence of cheating is not committed. A reference is also made to a judgment of this Court in the case of P. K. Dasgupta v. Jaysukhlal, 1983(2)24 Guj LR 941 where it was observed that criminal Courts should be more cautious and circumspect so as not to encourage the tendency on the part of the litigants to resort to a short cut of criminal prosecution.

10. Reference was also made to a judgment of this Court in the case of Hemendra Kumar Sukhlal v. Patel Jamnadas Ramjibhai (1980) 17 Guj LT 14. No doubt the report is in the language of the judgment, but only a part of a para of the judgment is reported, although the judgment runs into 10 pages. From the report it will appear that on dishonour of a cheque if the complainant made a demand of money, it would be a case of civil liability and the ingredients of Section 415 would not be satisfied merely because the cheque was dishonoured. However, going through the entire judgment of Mr. Justice V. V. Bedarkar in Misc. Criminal Appln. No. 358 of 1979 (not of 1978 as shown in the report), on page 5 of the judgment, the Court held that there was already a sale and delivery of the goods and there was no immediate transaction when the cheque was given. So, while receiving the cheque, the complainant was not required to deliver any property because he had already received the cheque. The issuance and dishonour of the cheque would not, therefore, constitute any offence and it was held to be a dispute of civil nature. In the light of these findings, the Court held that the element of mens rea was lacking and, therefore, observed that mere non-fulfilment of a promise cannot lead to an inference of petitioner's dishonest intention and the case merely amounted to civil liability. In the present case also mere non-fulfilment of the promise cannot necessarily lead to any inference of petitioner's dishonest intention. On the other hand, demand and acceptance of part payment would not reduce criminal offence (if committed and disclosed) to civil dispute. However, as found earlier, the circumstance disclosed in the complaint itself showed that the accused and the Mill Company had an intention to pay and in fact had made several cash payments, and the complainant had also waited for two months before receiving Rs. 2500/- as against the claim of Rs. 37,702.12 Ps. and even after the last payment of Rs. 1,000/- the complainant waited for more than two months. From all the circumstances in the complaint, it is impossible to hold that the accused had necessary criminal intention and, therefore, there was no ground for issuing the process.

11. The result is that application succeeds and is allowed and the process issued by the learned Metropolitan Magistrate on the complaint is quashed. Rule made absolute accordingly.


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