Section 420 IPC| Person Cheated Must Have Been Dishonestly Induced To Deliver Property: Supreme Court

“In other words, for attracting the provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses:

I the deception of any person; II fraudulently or dishonestly inducing that person to deliver any property to any person; and III dishonest intention of the accused at the time of making the inducement.”

In the present case, the complainant transferred a certain amount of money to the present appellant upon the insistence of another accused, no. 2, who was also the complainant's college friend. Apart from this, it was also alleged that accused no. 1 and 2 had duped the complainant for a heavy sum. The accused persons swindled all the amounts and cheated the complainant. The case was registered against accused no. 1 and 2 for the offence of cheating. In this, the appellant was also roped in.

Since the appellant's plea of quashing the FIR was declined by the High Court, the present appeal came to be filed.

At the outset, the Top Court expressed its concerns about converting purely civil disputes into criminal cases. Following this, the Court relied upon the landmark case of Prof. R.K. Vijayasarathy and Another v. Sudha Seetharam and Another to cull out the necessary ingredients for the offence of cheating. Based on this, the Court made the observations above.

Adverting to the facts of the case, the Court noted that the allegations with regard to inducement are only against accused Nos. 1 and 2. There was no role attributed to the present appellant. Furthermore, the complainant did not enter into any transaction directly with the appellant, as the amount was transferred only at the instance of accused no. 1.

“At the cost of repetition, it has to be noted that no role of inducement at all has been attributed to the present appellant…The version, if accepted at its face value, would reveal that, at the instance of accused No. 1, the complainant transferred the amount of Rs.20,00,000/- in the account of the appellant. On receipt of the said amount, the appellant immediately executed the sale deed in favour of accused No.1, who thereafter executed the GPA in favour of the complainant.”

Noting that dishonest inducement is a sine qua non in the offence of cheating, the Court observed the absence of the same in the present case. Accordingly, the Court said that even if the FIR is taken at face value, it does not disclose the ingredients of cheating.

“In that view of the matter, we find that the FIR or the charge sheet, even if taken at its face value, does not disclose the ingredients to attract the provision of Section 420 of IPC qua the appellant.”

In order to address the respondent's contention that the appeal should be dismissed because the chargesheet has been filed, the Court referred to its decision in Anand Kumar Mohatta and Another v. State (NCT of Delhi), Department of Home, and Another. Therein, it was held:

“Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialised into a charge-sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court.”

Thus, considering that continuing the criminal proceedings against the present appellant would amount to an abuse of the process of law, the Court allowed the appeal and quashed the FIR as far as the present appellant is concerned.

Case Title: A.M. MOHAN v. THE STATE REP BY SHO., 32027 / 2022

Citation : 2024 LiveLaw (SC) 197

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