B.K. Behera, J.
1. The petitioner and the opposite party No. 2 figure as the accused persons in a case of cheating under Section 420 of the I.P.C. (for short, the 'Code') instituted by the opposite party No. 1 as the complainant alleging that the petitioner, having placed an order for supply of coal with the opposite party No. 1 for Rs. 44,043.50 paise and having paid Rs. 35,000/- by a cheque and kept the balance amount of Rs. 9,043.50 paise to be paid, placed another order for Rs. 33,097,60 paise and drew a cheque for Rs. 42,141.10 paise bearing No. 034058 dt. Jan. 10, 1984 through his clerk, the opposite party No. 2, which was returned by the Bank as the petitioner had no money to his credit and in spite of several correspondences, the petitioner failed to clear up the arrears. On the basis of these averments in the petition of complaint and the statement of the petitioner recorded under Section 200 of the Cr, P.C. cognizance has been taken of an offence punishable under Section 420 of the Code against the petitioner and the opposite party No. 2 by the learned Additional Chief Judicial Magistrate, Cuttack and the petitioner has sought exercise of the inherent jurisdiction of this Court under Section 482 of the Cr. P.C. to quash the criminal proceeding as prima facie, no case under Section 420 of the Code has been made out. While exercising jurisdiction under Section 482 of the Cr. P.C. it may be kept in mind that interference is called for in rare and exceptional cases in the interests of justice and when the facts stated in the petition of complaint taken in their entirety, if accepted to be true, do not make out any case against the persons proceeded against.
2. The learned Counsel for the petitioner has submitted that in the absence of any allegation that the petitioner had no account in the Bank or that he hid made any representation that he had sufficient funds in the Bank when the cheque was drawn and handed over, a case of cheating could not have been instituted in law as the ingredients of an offence of cheating were absent. The learned Counsel for the opposite party No. 1 has submitted that as the cheque given by the petitioner had not been honoured as he had no money in the Bank, prima facie, there is a case against the petitioner and the opposite party No. 2 and no interference is called for in exercise of the inherent jurisdiction of this Court.
No notice has been issued to the opposite party No. 2 who is one of the accused persons as per the order dt. Oct. 22 1984, passed by this Court, as it was not necessary to issue a notice.
3. It is not a case in which it had been averred in the petition of complaint or stated by the opposite party No. 1 that the petitioner had no account in the Bank. It is not the case of the opposite party No. 1 that at the time of drawing the cheque, the petitioner had made a representation to the opposite party No. 1 that he had sufficient money in the Bank to cover the cheque. The question for consideration would be as to whether the facts alleged would amount to a civil wrong or would constitute an offence of cheating.
4. In order to hold a person guilty of cheating, the intention of the person must be dishonest and there must be mens rea. As held in : 1972CriLJ1243 State of Kerala v. Pareed Pillai in order to hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfil the promise. The distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of the alleged inducement which may be judged by his subsequent act, but of which the subsequent act is not the sole criterion. Mere breach of a contract cannot give rise to a criminal prosecution. In the absence of materials for the satisfaction of the Magistrate that the accused had any dishonest intention at the time the alleged promise or inducement was made, an offence of cheating cannot be said to have been established. In such cases, the dispute would be purely of a civil nature. See 1982 Cri LJ 1228 (Orissa) S. B. Goenka v. Rajendra Prasad Agrawalla (1983) 55 Cut LT 24, Lord Match Industries, v. M.S. Salvasekaran and (1984) 1 Orissa LR 15 : 1983 Cri LJ NOC 210 Prafulla Mohanty v. Ashok Kumar Das.
5. The same question which has arisen in this case came up for consideration by this Court in (1971) 1 Cut WR 930 : 1971 Cri LJ 1797 Duriodhan Khuntia v. Ali Ahmed and it was held therein that no case of cheating had been established. The question as to whether in the same circumstances, the act would constitute the offence of cheating was considered by a Division Bench of this Court in the case of G. Anji v. Sunanda Kar (1978) 46 Cut LT 560. It had been alleged in that case that the accused knew that he had no bank balance sufficient to cover the cheque and he issued it with the dishonest motive of silencing the victim when he demanded payment of his dues. In that case, the trial court had recorded an order of acquittal relying on the decision of this Court in (1971) 1 Cut WR 930 : (1971 Cri LJ 1797) (supra). The Division Bench held:
The act of drawing a cheque implies three statements as to the state of affairs existing at the tune when the cheque is drawn first, that the drawer has an account with the bank in question; secondly, that he has authority to draw on its for the amount shown on the cheque; and thirdly, that the cheque, as drawn, is a valid order for the payment of the amount, or that the present state of affairs is such that in the ordinary course of events, the cheque will, on future presentment, be honoured. It does not however, imply any representation that the drawer already has money in the bank to the amount shown on the cheque, for he may either have authority to overdraw, or have an honest intention of paying in the necessary money before the cheque can be presented - Vide Kanwar Sain v. The Crown ILR (1938) Lah. 662 : 1939-40 Cri LJ 494.
The learned single Judge who decided the case in Duriodhan Khuntia v. Ali Ahmed (1971) 1 Cut WR 930 : 1971 Cri LJ 1797 relied on the aforesaid principles. The petitioner in that case delivered a cheque for Rs. 3,000/- to the complainant and took a sum of Rs. 3,000/- from him in cash. The cheque was not honoured by the Bank on the ground that the amount to the credit of the accused did not permit such encashment. There was nothing in the evidence of the complainant to show that the accused made any representation that he had sufficient cash to cover the cheque in his bank account. The learned single Judge held that the possibility of the accused having been under an honest impression that the amount to his credit might cover the cheque, and even otherwise, the possibility of his having honestly intended of paying in the necessary money before the cheque would be presented could not be excluded. On the findings that the requisite fraudulent or dishonest intention or the element of deception had not been established, it was held that the offence of cheating had not been made out. We are in respectful agreement with the view taken by the learned single Judge in that case.
It has also been observed therein that drawing up of a cheque does not mean that the drawer has enough money in the Bank for he may have authority to overdraw or may have an honest intention of paying the necessary balance to the Bank before the cheque is presented for encashment. It has further been held that mere drawing up of a cheque for a specified amount even when the drawer knows that he does not have sufficient balance in his account to cover the amount for which the cheque is issued would not constitute cheating.
6. I would respectfully adopt the view taken by this Court in (1971) 1 Cut WR 930 : (1971 Cri LJ 1797) (supra) and (1978) 46 LT 560 (supra) and hold that on the basis of the materials mentioned in the petition of complaint and the statement of the opposite party No. 1 recorded by the court, no cognizance could be taken in respect of an offence punishable under Section 420 of the Code. It is necessary in the interests of justice that the criminal proceeding against the petitioner and the opposite party No. 2 should be quashed.
7. In the result, I would allow the revision and quash the criminal proceeding against the petitioner and the opposite party No. 2.