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Naveen Varshneya and anr. Vs. State and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtDelhi High Court
Decided On
Case NumberCriminal Miscellaneous (Main) Appeal No. 435 of 1983
Judge
Reported in26(1984)DLT227
ActsIndian Penal Code (IPC), 1860 - Sections 420
AppellantNaveen Varshneya and anr.
RespondentState and anr.
Advocates: D.R. Sethi and; Satish Chander, Advs
Cases ReferredIn Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi and
Excerpt:
.....code, 1973 - previous dealings between parties shows that most of payments made through postdated cheques - assurance by petitioner no. 1 that said cheques would be honoured on presentation on due dates does not fall within ambit of cheating - dishonest intention at time of making promise to be show for holding person guilty of offence of cheating - petitioners discharged. - - and it was the name of m/s kumar enterprises as well as in the name of his wife's concern m/s kumar traders that these purchases were made by petitioner no. 1 was given to understand that these amounts were due towards good already received but later on when he checked the accounts, it came to light that no such amounts were due to m/s radha krishan bimal kumar (p) ltd. it was held that the proceeding..........drawer' meaning thereby that petitioner no. i had no amount in his bank account. the remaining two aforesaid cheques were not presented for encashment on due dates in view of the first cheque dated 14-7-80 having already been dishonoured. (5) according to the petitioners the aforesaid post-dated cheques were issued when petitioner no. 1 was given to understand that these amounts were due towards good already received but later on when he checked the accounts, it came to light that no such amounts were due to m/s radha krishan bimal kumar (p) ltd. and in fact a sum of rs. 52,088.25 was due to petitioner no.1 and his concern m/s kumar enterprises and thus feeling that the aforesaid. cheques had been wrongly issued, the payment of all those three cheques was. stopped and intimation to this.....
Judgment:

Jagdish Chandra, J.

(1) This petition assails the order dated 3-2-1983 passed by Shri T.S. Oberoi, Addl. Sessions Judge, Delhi on a revision having been preferred by the petitioners Naveen Varshneya and Smt. Nirmal Varshneya against the order dated 22-5-1982 passed by Mrs. Aruna Suresh, Metropolitan Magistrate, Delhi whereby the learned magistrate had summoned both the petitioners in the complaint filed under Sections 420, 120-B and also under Section 34 Indian Penal Code and which order was held valid by Shri T.S. Oberoi in revision.

(2) Petitioner No. 1 Naveen Varshneya and petitioner No. 2 Mrs. Nirmal Varshneya are husband and wife and whereas the former is sole proprietor of M/s Kumar Enterprises the latter is the sole proprietor of M/s Kumar Traders. Both these concerns of the petitioners have been having business dealings with M/s Radha Krishan Bimal Kumar (P.) Ltd, Khari Baoli Delhi in which the complainant Suresh Chand Sharma is the Sales Executive. Petitioner No. 1 Naveen Varshneya alone had been in contact with M/s Radha Krishan Bimal Kumar (P) Ltd. for making purchases of orient black, Phil black and zinc oxide etc. and it was the name of M/s Kumar Enterprises as well as in the name of his wife's concern M/s Kumar Traders that these purchases were made by petitioner No. 1 for a period of about 8 months from November 1979 up to July 1980, wherein he was to pay a balance sum of Rs. 5052.75 in the account of his own concern M/s Kumar Enterprises and another sum of Rs. 43,720.60 in the account of his wife's concern M/s Kumar Traders, the total thus being to the tune of Rs. 48,773.25.

(3) Petitioner No. 1 had already cleared off the price payment in respect of a large number of various items of the aforesaid purchases, by means of post-dated cheques and gave the following three post-dated cheques admittedly against the aforesaid subsisting liability of Rs. 48,773.25 as on 12-7-1980 allegedly assuring that the same would be honoured on presentation on due dates:

(1) No. 4580 dated 14-7-80 Rs. 25,460.00 (2) No. 4594 dated 9-8-80 Rs. 10,000.00 (3) No. 4595 dated 15-8-80 Rs. 13,054.25 Total Rs. 48,514.25

(4) The first cheque aforesaid dated 14-7-80 for Rs. 25,460.00 was dishonoured with the remarks 'referred to drawer' meaning thereby that petitioner no. I had no amount in his bank account. The remaining two aforesaid cheques were not presented for encashment on due dates in view of the first cheque dated 14-7-80 having already been dishonoured.

(5) According to the petitioners the aforesaid post-dated cheques were issued when petitioner No. 1 was given to understand that these amounts were due towards good already received but later on when he checked the accounts, it came to light that no such amounts were due to M/s Radha Krishan Bimal Kumar (P) Ltd. and in fact a sum of Rs. 52,088.25 was due to petitioner no.1 and his concern M/s Kumar Enterprises and thus feeling that the aforesaid. cheques had been wrongly issued, the payment of all those three cheques was. stopped and intimation to this effect was sent to the bank and M/s Radha Krishan Bimal Kumar (P) Ltd. complainant-firm was also informed about the same in writing and consequently it was only the first post-dated cheque which was presented for encashment and not the remaining two cheques.

(6) The complainant-firm M/s Radha Krishan Bimal Kumar (P) Ltd. lodged a report with P.S. Labori Gate on 20-7-1981 making allegations of cheating against the petitioners but the police took no action upon the same.

(7) Thereafter on 1-11-1981 the complainant-firm filed a civil suit for the recovery of Rs. 86,038.62 against both the petitioners and their aforesaid proprietory concerns and the same is pending.

(8) The petitioners alleged that in order to brow-beat, harass and blackmail them Suresh Chand Sharma Sales Executive of the Complainant firm filed a complaint under Section 420 read with Sections 120-B and 34 Indian Penal Code in the court of Mrs. Aruna Suresh, Metropolitan Magistrate, Delhi, presently pending in the court of Shri D.S. Sidhu, Metropolitan Magistrate, Delhi wherein Mrs. Aruna Suresh had ordered the summoning of the petitioners as accused persons and which order was confirmed by the impugned order passed in revision by Shri T.S. Oberoi, Addl. Sessions Judge.

(9) The contention of the learned counsel for the petitioners is that the subject-matter of the complaint is in reality a question of civil liability and not a matter of criminal prosecution inasmuch as the three post-dated cheques in question had admittedly been given by petitioner no. 1 to the complainant-firm M/s Radha Krishan Bimal Kumar (P.) Ltd. as against or for the payment of the subsisting liability, and to make his position clear he has invited the attention of the Court to the averments made by the complainant in paragraph 6 of the complaint which reads as follows :

'ACCUSEDNo. 1 gave following 3 post-dated cheques against subsisting liability of about Rs. 48773.25 on or about 12-7-80 then existing and assuring that the same would be honoured on the presentation on the due dates.

(1) No. 4580 dated 14-7-80 Rs. 25.460.W (2) No. 4594 dated 9-8-80 Rs. 10,000.00 (3) No. 4595 dated 15-8-80 Rs. 13,054.25 Total Rs.48,514.25

It would appear that the total amounts of the aforesaid three cheques comes to Rs. 48514.25 which is little less than the balance amount of Rs. 48773.25. The complainant's company did not sell any raw material after 12-7-1980.'

(10) From the perusal of the aforesaid paragraph of the complaint it is abundantly clear that the complainant himself admitted the factual position as now pointed out by the learned counsel for the petitioners regarding the cheques in question having been given by petitioner No. 1 to the complainant only against a subsisting and then existing liability. In order to support the legal position with these admitted facts that it is not a matter of criminal prosecution but only a matter of civil liability, the learned counsel for the petitioners has cited before me a number of authorities. In H.R. Shaw v. Suresh Chandra Mitter : AIR1936Cal324 where the accused gave a post dated cheque for certain goods delivered to him at an earlier date and got a receipt, but the Cheque was dishonoured, it was held that the receipt was not a valuable security within the meaning of Section 30, and the accused was not guilty of cheating and that the remedy of the complainant lay in a civil court for breach of contract. The ratio of this decision appears to have been derived from the definition of the word 'cheating' stated in Section 415 of the Indian Penal Code, 1860 which read as follows : Section 415:

'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.' Explanationn-A dishonest concealment of facts is a deception within the meaning of this section.'

(11) The perusal of the aforesaid definition of the word 'cheating' contemplates that there should be a fraudulent or dishonest inducement of a person by deceiving him and the person so deceived should be induced to deliver any property to any person or to consent that any person shall retain that property. M. M. S. T. Chidambaram Chettiar v. Shanmugham Pillai Air 1938 Madras 129 lays down that the High Court has inherent jurisdiction under Section 561-A (now Section 482) Cr. P. C. to pass any order necessary to prevent abuse of the process of any court and that in the world of business, things are often done which are betrayals of confidence and deception which arouse moral indignation, but are nevertheless civil wrongs which can be righted by Civil Courts and are not crimes which can be punished by a Criminal Court. It is further observed therein that not every immoral act is criminal and it is on abuse of the process of a court to attempt to create a new crime in order to compel men to conform to a high standard of probity in business dealings or to force them to execute their premises and thereforee the High Court, to prevent specious and spiteful criminal prosecutions for actions which, though strictly dishonourable, yet do not amount to crimes, has jurisdiction to interfere. This very authority ultimately held as follows :

'A post-dated cheque in payment of goods already received is a mere promise to pay on a future date and a broken promise is not a criminal offence, though it may amount in certain business relations to discreditable behavior.'

(12) Sita Ram v .State 1981 Rlr (Note) 28 also followed Air 1938 Madras 129 (Supra). In Superintendent and Remembrancer of Legal Affairs, West Bengal v. Birendra Chandra Chakravarty : 1974CriLJ341 where there was long and intimate relation between the accused and the complainant and there were numerous transactions between them it was observed that it would be difficult to determine the extent to which the complainant was duced or persuaded by mis-representation to part with rights in certain properties alleged to be the subject-matter of breach of trust and it was held that it was a dispute of an essentially civil nature to be decided between the parties before any question of criminal liability could be adjudicated upon. Even in the case in hand the dealings between the parties started on 7-11-1979 and continued untill 12-7-1980 as would be seen from the notice Ext.PW1/E dated 19-6-1982 given by the complainant to the petitioners and the details given therein would further show that most of the payments were made by petitioner no. I to the complainant by means of post-dated cheques. There is, thus, hardly a question of any cheating on the part of the petitioners towards the complainant-firm in regard to the giving of the aforesaid three post-dated cheques in question, the first of which was dishonoured and the remaining two not presented for payment, inasmuch as the same had been issued in respect of the liability already existing and subsisting.

(13) In Trilok Singh and others v. Statya Deo Tripathi : 1980CriLJ822 a hire-purchase agreement was entered into between the complainant and the finance-corporation accused ; the loan was payable in monthly Installments and according to the agreement, on default of any one Installment the financier had the right to terminate hire-purchase agreement even without notice and seized the truck subject-matter of that agreement. The complainant's case was that only a blank form was got signed by him and further that on default of the third Installment the truck was forcibly seized and removed by the financiers and the complainant filed a criminal complaint against the financiers in this connection for certain offences. It was held that the proceeding initiated on the complaint was clearly an abuse of the process of the Court and it was not a case where any process ought to have been directed to be issued against the accused and on the well-settled principles of law it was a very suitable case where the criminal proceeding ought to have been quashed by the High Court in exercise of its inherent power and the dispute raised by the complainant was purely of a civil nature. In Hari Prasad Chamaria v. Bishun Kumar Surekha and others : 1974CriLJ352 appellant intending to start business gave in full faith a large amount to respondents for the same and the respondents started business in their own name and 'refused to render accounts or return money and it was held that even assuming prima facie all the allegations in the complaint to be true they merely amounted to a breach of contract and could not give rise to criminal prosecution and that there was nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with the money nor did the complaint indicate that the respondents had induced the appellant to pay them the amount parted with and the appellant also did not allege the respondents making any representation to him for parting with the money and the mere fact that they did not abide by their commitment as to starting of the business in complainant's name as agreed to would not fasten them with criminal liability. In The State of Kerala v. A Prasad Pillai and AM. : 1972CriLJ1243 Khanna J. delivering the opinion of the court said :

'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 fulfill the promise.'

(14) To the same effect is the authority reported as S.B. Goenka v. Rajendra Prasad Agarwalla (Orissa High Court) wherein as per the allegations contained in the complaint the petitioner therein and one Gobind Ram placed an order for supply of mango kernels at the rate of Rs.750.00 per M.T. and it was alleged that the petitioner therein had assured the opposite party that the kernels could be booked under the Hundi covering approximately 70 per cent of their value and the balance 30 per cent would be paid after the goods reached the destination and on the aforesaid terms, a contract was entered into between the parties, and in pursuance of that contract the opposite party dispatched 460 bags of mango kernels in two consignment and the petitioner therein honoured the Hundis and paid the satire amount to the extent of 70 per cent of their value but did not pay the balance of 30 per cent intentionally. The order initiating criminal proceedings in that case for offence under Section 420 Indian Penal Code was held to be an abuse of the process of Court and was quashed.

(15) Looking to the aforesaid authorities and the assertions made in the complaint as also the evidence of re-charge stage, it cannot be said that the offence of cheating is made out and rather on the other hand what appears is that it is a matter only of civil liability arising out of a broken promise on the part of the petitioners in the matter of issuance of the three post-dated cheques in question by way of payment in respect of subsisting liability and the dishonouring thereof being only in the nature of broken promises on the part. of the petitioners. The further assertion that petitioner No. 1, at the time of giving these post-dated cheques, assured that the same would be honoured on presentation on due dates, does not fall within the ambit of cheating especially when there has been dealings between the parties for a sufficiently long time as already mentioned above and most of the payments were made through postdated cheques, the dishonest intention of deception on the part of the petitioners at the time of giving the three post-dated cheques in question cannot be inferred and in this view of the matter the authority Bhola Nath Arora and Anr. v. The State 84-1982 Plr (Delhi Section) 125 holding that what is the material is the intention of the drawer at the time the cheque is issued, -and the intention of cheating has to be gathered from the facts on the record, does not help the complainant.

(16) In Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi and others : 1976CriLJ1533 four types of cases were categorised wherein an order of the magistrate issuing process against the accused can be quashed or set aside and the same are reproduced below :

'(1)Where the allegations made in the complaint or the statement of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused ; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can over reach a conclusion that there is sufficient ground for proceeding against the accused. (3) Where the discretion exercised by the magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like.'

(17) The case in hand falls in category no. I in as much as the allegations made in the complaint or the statement of the witnesses recorded at the pre-charge stage taken at their face value make out no case against the petitioners and the complaint does not disclose the essential ingredients of the offence under Section 420 Indian Penal Code which is alleged against them. The complainant Suresh Chand Sharma in his statement as PW1 also talked of the giving of these three post-dated cheques against the existing liability. In the face of the aforesaid Supreme Court authority it would be futile to contend that the discretion exercised by the learned magistrate and affirmed in revision by the learned Additional Sessions Judge, should not be interfered with by the High Court in the exercise of its inherent power under Section 482 Cr. P. C.

(18) In view of the above discussion and in exercise of the inherent jurisdiction under Section 482 Cr. P. C. the orders of both the courts below are quashed and the petitioners stand discharged in the complaint filed by Suresh Chand Sharma Sales Executive of the complainant-firm M/s Radha Krishan Bimal Kumar (P.) Limited, Khari Baoli, Delhi.


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