CAUSE TITLE:
Amitbhai Harilal Ruparelia & 2 Others(s) vs State Of Gujarat & 1 Other(s)
DATE OF JUDGEMENT:
19 April 2022
JUDGE(S):
Honourable Mr. Justice Nikhil Kariel
PARTIES:
Applicant/Accused: Amitbhai Harilal Ruparelia & 2 Other(s)
Respondent/Complainant: State Of Gujarat & 1 Other(s)
SUBJECT
The six applicants prayed for the quashing of the Criminal Complaint registered under Sections 406, 420, 114 and 120B of IPC. Since the facts of all the applications were similar, they were decided by the common judgement.
IMPORTANT PROVISION
The Indian Penal Code, 1860
Section 114: Abettor present when offence is committed
Any person if present when the act or offence for which he would be punishable in consequence of the abetment is committed, he shall be deemed to have committed such act or offence.
Section 120B: Punishment of criminal conspiracy
Section 406: Punishment for criminal breach of trust
Whoever commits criminal breach of trust shall be punished with imprisonment which may extend to three years, or with fine, or with both.
Section 415: Cheating
Whoever deceives any person and induces the person to deliver any proper¬ty to any person or to do an act and if such act causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheating”.
Section 420: Cheating and dishonestly inducing delivery of propery
Whoever cheats and thereby dishonestly induces the person de¬ceived to deliver any property to any person, shall be punished with imprisonment for a term which may extend to seven years, and shall also be liable to fine.
FACTS
- The complainant's company is engaged in manufacturing cloth.
- The accused approached the complainant for the sale of grey cloth.
- The complainant as per the instructions of the accused sent grey cloth to various processing units.
- The accused promised the complainant that they would make payment of the goods within one month of the cloth being sold and based on such promise, the complainant gave cloth of huge value to the accused.
- The accused sold cloth to other people and misappropriated the amount and thus, cheating the complainant and also committing a breach of trust.
ISSUE RAISED
Whether a commercial transaction a reason for holding the offence of cheating under Section 415 of IPC?
ARGUMENTS ADVANCED BY THE APPLICANTS
- The accused intermittently made payments to the complainant, on one account the material sent by the complainant was defective and sub-standard, so the amount was not paid by the accused.
- An essential requirement of an offence punishable under Section 406 of IPC is a criminal breach of trust, whereas in this case, the offence of breach of trust could not be alleged.
- The FIR filed must be quashed as a purely civil and commercial transaction between the parties was given a criminal colour.
ARGUMENT ADVANCED BY THE RESPONDENT
- The allegation that the goods sent by the complainant were sub-standard and defective, is nothing but an excuse.
- The applicants urged that they had supplied goods to various manufacturers nationwide. Therefore, they couldn't send back the material in its original form. The intention to cheat from the inception of the transaction itself is one of the most essential requirements for an offence punishable under Section 420 of IPC. The respondents not returning the cloth even as per the direction of the Court, clearly shows that the respondents have dishonestly misappropriated the property.
- It is true that the applicants and the complainant had a commercial transaction, but that by itself would not be an impediment for the complainant to file an FIR for the recovery of the dues.
COURT’S OBSERVATION
- The parties were engaged in a commercial transaction. While the fact of the transaction between the parties being a commercial or a civil transaction appears to be a settled position, at the same time, it also requires to be mentioned that for the same set of transactions the remedies to a party may occur in civil as well as in criminal proceedings and whereas even if a civil remedy is availed by a party, he is not precluded from the filing of proceedings in criminal law. The same was held by the Hon’ble Apex Court in the case of K. Jagadish Vs. Udaya Kumar G. S. & Anr [(2020) 14 SCC 552]. In Pratibha Rani v. Suraj Kumar & Anr., the Court summed up the distinction between the two remedies. There can be cases where criminal law and civil law can run side by side. They are mutually inclusive and essentially differ in their content and consequence.
- On one hand, it was contended by the applicants that on account of the sub-standard quality of the goods, they rejected the same. The complainant agreed to replace the goods if they were returned to him in the same condition and also agreed to the disposal of the FIR. However, the goods were not returned. The applicants stated that the goods may not be available in the same form, meaning that the goods were utilised by the manufacturers. Thus, it appears that the applicants misappropriated the sale consideration of the goods.
- The Court relied upon the decision of the Hon’ble Supreme Court in Rajesh Bajaj Vs. State NCT of Delhi and Ors, [(1999) 3 SCC 259]. In which it was held a commercial transaction is hardly a reason for holding that the offence of cheating would elude from such a transaction. Illustrations(f) under Section 415 of the IPC states "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." It is the intention of the person who induces the victim and not the nature of the transaction that decides whether there was a commission of an offence or not.
CONCLUSION
- In the FIR, the complainant mentioned that he was induced by the accused to believe that the accused would honour payment, but he, later on, realises that the intentions of the accused were not clear. He also mentioned that the respondent after receiving the goods sold them to others and still did not pay the money. The Court concluded that such allegations would prima facie make out a case for the investigation by the authorities.
- At this stage of the investigation, it was unjustifiable to test the allegations as levelled in the FIR to find out whether ingredients under Section 415 of IPC would be made out or not.
- The Court rejected the present group of applications made on the ground of being meritless.
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