Offence Of Cheating & Criminal Breach Of Trust Can't Stand Together: High Court Laments "Routine" FIRs By Rajasthan Police In Commercial Matters

The Rajasthan High Court has reiterated that Section 420 (cheating) and 405 (criminal breach of trust) of IPC (corresponding to Section 318 and 316 of Bharitya Nyaya Sanhita, 2023, respectively) are antithetical to each other and cannot not be invoked together against an accused person.

The bench of Justice Arun Monga observed that under Section 405, the main element is entrustment of property by the complainant to the accused and no element of dishonesty is present on part of the latter before or at the time of such entrustment.

However, under Section 420, it is necessary to show that dishonesty on part of the accused existed prior to or at the time of delivery of the property and the accused induced the complainant to deliver the property under false pretenses.

The Court was hearing a petition filed by an individual who was charged for offences under Sections 420 and 405.

The petitioner had bought certain goods from the co-accused for which he had allegedly paid full price. However, original seller of the goods (complainant) filed a report with the police that the co-accused had not paid the price for the goods. On the basis of this report, the police filed an FIR making both the petitioner as well as the co-accused as accused. During investigation, the goods were also seized by the police.

The petition was filed by the petitioner seeking release of those goods which were of perishable nature. It was argued by the petitioner that he was a bona fide purchaser of those goods and had no knowledge about any dispute between the complainant and the co-accused.

The Court enumerated the requisite ingredients under Section 420 and 405, IPC and held that offences under both the sections were mutually antithetical and cannot stand together. It also noted that the dispute was purely commercial in nature and did not disclose commission of any offence.

Yet, the Court lamented, "before registering an FIR, any preliminary inquiry was not at all conducted, to ascertain whether or not a cognizable offence was disclosed. Had the needful been done, obviously the result would have been different."

Court has now instructed the Rajasthan Police to ensure that where the transaction is purely commercial, such as sale-purchase of goods or even immovable property, and the interest/ title in the goods/ property has passed to the purchaser, to conduct a mandatory preliminary enquiry. It has cautioned that unless the report thereof shows that there is prima facie material suggestive of commission of offence, FIR ought not to be registered.

"The preliminary enquiry must be conducted with certain alacrity (a week or 10 days at the most) so as to not let the alleged offender gain advantage to either destroy the evidence or to abscond or otherwise take any other advantage during the PE," it added and quashed the FIR against the petitioner.

Title: Rana Ram v State of Rajasthan & Anr.

Citation: 2024 LiveLaw (Raj) 244

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