1. This is an application under Section 561-A, Criminal P.C. with the prayer that the criminal proceedings pending against the accused applicants in the Court of Sub-Judge Magistrate first class Jammu be quashed. The following facts have given rise to this application:
The accused applicants, Ths. Devia Ram and Beli Ram are alleged to have entered into an agreement with the complainant, L. Ram Chand, stipulating that they would engage 100 well-trained sawyers for sawing logs in Mar-mat jungle. It was further stipulated that by 15th Chet 2008 the work will be commenced which was to be completed by Maghar 2009. At the time of executing the agreement, the complainant advanced to the accused applicants a sum of Rs. 1000/-. According to the agreement, Rs. 2000/- more were to be paid. to the accused-applicants in the month of Phagan 2008. The second installment of Rs. 2000/- which was stipulated to be paid in the month of Phagan 2008 was however paid on 26th Chet 2008. It is alleged by the complainant that in spite of the fact that an advance of Rs. 3000/- was made to the accused applicants, they did not at all commence work as well stipulated by them. The complainant further affirms that the accused had fraudulent intentions from the very beginning pursuant to which they made false representations and thereby induced the complainant to part with a sum of Rs. 3000/-. It is further alleged by the complainant that in case he had known about the fraudulent intentions of the accused, he would not have parted with the money. On these facts a complaint was submitted on 3rd Bhadon 2009. Before proceeding further, it might be conducive to the right understanding of the dispute to give below a brief analysis of the facts on which the present complaint is based.
(a) A reference to the agreement would show that it has been signed only by Beli Ram accused applicant. Devia another accused applicant has not affixed his signature to this agreement. Beli Ram who styles himself as the Karta of the joint family of which Devia is also a member appears to have signed the agreement on Devia's behalf, as well. The sum of Rs. 2000/- which was advanced by the complainant was received by Beli Ram alone, as would become evident by a reference to the receipt of 26th Chet 2008 which too has been signed by Beli Ram alone. Under these circumstances I wonder how criminal liability could be fastened upon Devia at least. If any-false representation has been made or if any-fraudulent inducement has been held out, it was by Beli Ram. By no stretch of imagination can Devia be involved in an affair with which ostensibly he had no concern.
(b) Again a reference to the agreement would show that Beli Ram or Devia were not unknown figures to the complainant. Clause-No. (6) of the agreement would show that Beli Ram and Devia were working for the complainant even before. Beli Ram in this agreement has stipulated that whatever amount from previous accounts will be found due from him to the complainant, he will get credit for that and that sum will be deducted from the amount found due to the applicants under the present agreement.
(c) Then again according to the agreement the applicants were to be paid Rs. 2000/- in the month of Phagan 2008. As against this, admittedly this amount has been paid to Beli Ram on 26th Chet 2008. This appears to be a clear breach on the part of the complainant himself.
(d) According to the agreement, the work was to be started from 15th Chet 2008. The second installment of Rs. 2000 was advanced to Beli Ram accused applicant on 26th Chet 2008 that is to say a month after it was due to be paid and 11 days after the work was to commence. The inference is obvious that in case the accused persons had not started work on 15th Chet 2008, there was no reason as to why an advance of Rs. 2000/- should have been made by the complainant to Beli Ram on 26th Chet 2008.
(e) A reference to the complaint would show that it has been drafted and presented in Court on 3rd Bhadon 2009. In case the accused persons had not at all worked even after getting a huge sum of Rs. 3000/-, there is no reason as to why the complainant should have remained silent for nearly six months. According to the agreement the third installment of Rs. 7000/- was to be paid much earlier than the date on which the complaint was lodged, i.e., 3rd Bhadon 2009. This amount was to be paid in the month of Jeth 2009. The least that one would have expected of the complainant was that he would have served the accused persons with a notice explaining the reasons for withholding the third installment.
2. The above analysis of the facts of the case would make it clear that the whole affair is a case of breach of contract, pure and simple. Breaches seem to have been made both by the complainant and the accused.
3. The learned Counsel appearing for the complainant (Non-applicant) has argued that since the accused persons had received money from the complainant with no intention to carry out the terms of the agreement, it was a clear case of cheating. But the learned Counsel has forgotten that a preconceived intention of not carrying out the terms of an agreement has to be established and not to be presumed from the mere receipt of money and not working subsequently according to the terms of the agreement. Mere receipt of money would not be cheating unless it is shown that it was received with the preconceived intention of denying it later on. If the intention is changed subsequently it would not be cheating. In - Sheosagar Pandey v. Emperor 159 Ind Cas 167 (1) (Pat) (A) it has been held that:
Mere breach of a contract cannot give rise to a criminal prosecution. The distinction between a case of mere breach of contract and one of cheating depends 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. Where there is no clear and conclusive evidence of the criminal intention of the accused at the time the offence is said to have been committed and where the party said to be aggrieved has an alternative remedy in the civil court, the matter should not be allowed to be fought in the criminal courts.
4. In - Ram Saran v. Crown AIR 1923 Lah 621 (B) a petitioner was convicted of cheating on the ground that in spite of receiving from his debtor, the complainant, cash and cattle in payment of what he owed him he gave him notice later on for payment of the debt originally due and denied what he had already received. On these facts it was held that
there was nothing to show that the petitioner received payment with the preconceived intention of denying it later on. If he subsequently denied it, he cannot be said to have cheated the debtor though this conduct of him was highly reprehensible.
5. Nor is there any explanation forthcoming as to why the second installment was not advanced to the applicants in the month of Phagan 2008 as was stipulated. Again the significance of the fact can never be minimized that if the accused persons had not started work on 15th Chet 2008, why was an advance made to them on 26th Chet? Then again if after having taken this amount of Rs. 3000/-no work was done by them, why was not as, notice given to them? Why did the non-applicant wait for six long months before the present complaint was brought? All these are very pertinent questions that cannot be lost sight of. It would also show that even complainants did not believe that the accused persons were guilty of cheating. I am, therefore, definitely of the opinion that the whole affair is a clear breach of contract. A breach of contract might involve a breach of faith, a betrayal of confidence, and might arouse moral indignation. But that would not convert it into a criminal offence. In - Chidambaram Chattier v. Shanmugham AIR 1938 Mad 129 (C) it has been held that:
The High Court has inherent jurisdiction under Section 561-A, Cr.P.C. to pass any order necessary to prevent abuse of the process of any Court. In the world of business, things are often done which are betrayals of confidence and deceptions 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. Not every immoral act is criminal and it is an 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 promises. And therefore the High Court, to prevent specious and spiteful criminal prosecutions for actions which, though strictly dishonorable yet do not amount to crimes, has jurisdiction to interfere.
6. I am in respectful agreement with the enunciation of law made in these rulings.
7. In the result this application has to be accepted, since the facts of the case do not disclose a criminal offence. Devia was a signatory neither to the agreement nor to any receipts. But even then he has been arraigned as an accused, which is a flagrant case of abuse of the process of court.
8. I, therefore, order that the criminal proceedings pending in the Court of the Sub-Judge Magistrate First Class, Jammu against Ths: Devia Ram and Beli Ram be quashed. The order of the Sessions Judge, Jammu dated 15th Magh 2009 rejecting the revision application of the applicants is set aside. Bail bonds if any of the accused persons Devia and Bell Ram are discharged and they be set free.