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Mitesh Kumar J. Sha vs. The State of Karnataka and Ors. - (Supreme Court) (26 Oct 2021)

Key ingredient of having a dishonest or fraudulent intent under sections 405, 419 and 420 of IPC must be established, mere breach of contract is not cheating



Present appeal is directed against the judgment and order passed by the High Court filed by the Appellants under Section 482 of the Code of Criminal Procedure, 1973 (‘CrPC’) challenging the FIR implicating the Appellants for offences under Section 420 read with Section 34 of Indian Penal Code, 1860 (IPC) and to quash the proceedings initiated pursuant to charge sheet against the Appellants for offences punishable under Sections 406, 419, 420 read with Section 34 of IPC. The High Court vide order impugned dismissed the same.

The Appellants have contended that, the sequence of events in the instant case do not fulfill the necessary ingredients of an alleged offence, therefore Respondent No. 2 has been simply trying to impart criminal color to a civil dispute.

In the instant case, the complaint levelled against the Appellants is one which involves commission of offences of criminal breach of trust and cheating. While a criminal breach of trust as postulated under section 405 of the IPC, entails misappropriation or conversion of another’s property for one’s own use, with a dishonest intention, cheating too on the other hand as an offence defined under section 415 of the IPC, involves an ingredient of having a dishonest or fraudulent intention which is aimed at inducing the other party to deliver any property to a specific person. Both the sections clearly prescribed ‘dishonest intention’, as a pre-condition for even prima facie establishing the commission of said offences.

Although, there is perhaps not even an iota of doubt that a singular factual premise can give rise to a dispute which is both, of a civil as well as criminal nature, each of which could be pursued regardless of the other. In the instant case, the actual question which requires consideration is not whether a criminal case could be pursued in the presence of a civil suit, but whether the relevant ingredients for a criminal case are even prima facie made out. No cogent case regarding a criminal breach of trust or cheating is made out.

The dispute between the parties, could at best be termed as one involving a mere breach of contract. Where the key ingredient of having a dishonest or fraudulent intent under sections 405, 419 and 420 of IPC is not made out, the case at hand, in is a suitable case necessitating intervention of this Court.

Existence of dishonest or fraudulent intention has not been made out against the Appellants. Though the instant dispute certainly involves determination of issues which are of civil nature, pursuant to which Respondent No. 2 has even instituted multiple civil suits, one can by no means stretch the dispute to an extent, so as to impart it a criminal colour. this Court has at innumerable instances expressed its disapproval for imparting criminal color to a civil dispute, made merely to take advantage of a relatively quick relief granted in a criminal case in contrast to a civil dispute. Such an exercise is nothing but an abuse of the process of law which must be discouraged in its entirety. The impugned order passed by the High Court is set aside. Appeal allowed.


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