The Jharkhand High Court has held that in the absence of any allegation of deception, false promise, or inducement at the time of the transaction, merely the breach of undertaking to repay the loan in the manner claimed cannot be a basis for conviction under Section 420 of the Indian Penal Code. A bench of Justice Anubha Rawat Choudhary, while setting aside the conviction of the accused, noted,
"This Court also finds that the dispute between the petitioner and the informant was essentially in the realm of civil dispute and there being no evidence on record that the petitioner had the intention to cheat the informant right from the inception of the transaction of extending friendly loan/handing over mobile and golden ring to the petitioner, the conviction of the petitioner under Section 420 of Indian Penal Code cannot be sustained in the eyes of law."
In the present case, the Petitioner, Saluka Dogma, was the sole accused of offenses under Sections 323,406,420 and 452 of the Indian Penal Code [IPC]. Upon trial, the accused was guilty of an offense under Sections 406/420, and 323 of Indian Penal Code read with Section 34 of Indian Penal Code and acquitted for an offense under Section 452 of Indian Penal Code. On appeal, the acquitted the Petitioner for an offense under Sections 406 and 323 of IPC but upheld his conviction under Section 420 of IPC, sentencing him to rigorous imprisonment for two years for offense and fine of Rs.500/-.
The prosecution case is that the accused took a sum of cash, mobile phone, and gold ring from the complainant on the promise to return. However, the complainant alleges that the accused neither returned the mobile phone and the golden ring nor the loan amount. The accused and complainant agreed on monthly installments of Rs.2,000/- for return, but despite that, the Petitioner did not fulfill his promise. It is also alleged that the accused came to the complainant's house along with four other persons asking to return all the documents; when the complainant denied it, the Petitioner assaulted him and threatened to kill him.
The Petitioner, represented by Advocate Saurav Kumar Singh, argued against conviction under Section 420 because there is no material on record to indicate that there was no ill intention or fraudulent intention of the Petitioner since the beginning. He also argues that the entire dispute is of pure civil nature. This aspect of the matter has not been properly considered by the learned courts below. Accordingly, the appellate Court's judgment upholds the conviction under Section 420 of the Indian Penal Code.
The respondent, represented by Additional Public Prosecutor Mr. Sanjay Kr. Srivastava did not dispute the factual matrix laid by the Petitioner, leading to the charges that the amount taken as the loan was not returned by way of monthly installments as promised.
The Court referred to V.Y. Jose and Another v. State of Gujarat and Another laying two ingredients of Section 420. First, a deception either by making a false or misleading representation or by other action or omission. Secondly, fraudulently or dishonestly inducing any person to deliver any property, or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
In the case, the Supreme Court held,
"For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had 11 fraudulent or dishonest intentions at the time of making a promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code can be said to have been made out."
This Court held that it is a well-established principle of law that every breach of contract or every dispute under an agreement does not amount to the offence of cheating. It would amount to cheating only in those cases where any deception played at the very inception. It noted,
"To establish the offence of cheating, the accused should be shown to have had the fraudulent or dishonest intention at the time of making a promise or representation."
This Court observed no allegation that the Petitioner has played deception or has ever made any false promise or inducement causing the informant to part with the money. In the absence of such allegation, no offence under Section 420 of the Indian Penal Code can be said to be made out. It noted,
"This Court finds that the breach of undertaking to repay the loan/return the articles in the manner claimed cannot be a basis for prosecuting or convicting a person under Section 420 of the Indian Penal Code. Even as per the statement of the prosecution witness, P.W-6, the Petitioner repaid the part of the amount, and the balance remained unpaid, and the articles were not returned. In view of the aforesaid findings, this Court finds that 13 basic ingredients of offence under Section 420 of Indian Penal Code are totally absent in the present case."
The Court made observations on the decisions of the lower courts while setting them aside,
"The conviction of the Petitioner under Section 420 of Indian Penal Code by the learned trial court which has been upheld by the learned appellate Court calls for interference in revisional jurisdiction of this Court to meet the ends of justice and rectify the illegality and perversity committed by the learned courts below in convicting the Petitioner under Section 420 of Indian Penal Code. Accordingly, the conviction and sentence of the Petitioner for alleged offence under Section 420 of Indian Penal Code is hereby set aside."
Advocate Saurav Kumar Singh appeared for the petitioner.
Title: Saluki Deogam v. The State of Jharkhand