Case Note & Summary
The applicant, Nandkishor Eknath Kothawade, filed an application under Section 482 of the Code of Criminal Procedure, 1973, seeking to quash the order dated 12th February 2014 passed in R.C.C. No. 1158 of 2013 by the Judicial Magistrate First Class, Court No.6, Nashik, and the FIR being C.R. No. 41 of 2014 dated 27th February 2014 registered with Ambad Police Station. The respondent No.2, Dinesh Murlidhar Pingale, had filed a complaint alleging that in February 2011, the accused persons induced him to invest Rs.5,00,000 in the business of M/s. Shri Swami Samarth Investment with a promise of huge profits. In July 2011, when the complainant demanded return of principal and profit, the accused avoided payment. In March 2012, accused No.1 issued a cheque of Rs.14,40,000 (including principal and profit), which was dishonoured. The complainant issued a statutory notice but the accused refused to pay. The complainant alleged cheating and criminal breach of trust. The applicant, one of the accused, argued that the dispute was purely civil in nature, as the complainant voluntarily invested money and there was no deception from the inception. The court examined the complaint and found that the allegations did not disclose any criminal offence. The court held that for an offence of cheating under Section 420 IPC, there must be deception at the time of initial inducement, which was absent here. Similarly, for criminal breach of trust under Section 406 IPC, there must be dishonest misappropriation, which was not alleged. The court concluded that the dispute was essentially civil in nature, and allowing criminal proceedings to continue would be an abuse of process of law. Accordingly, the court quashed the complaint and the FIR.
Headnote
A) Criminal Procedure Code - Quashing of FIR - Section 482 Cr.P.C. - Inherent Powers - Dispute arising from investment of money with promise of profit, cheque dishonour, and failure to return principal - Held that the dispute is essentially civil in nature, as the complainant voluntarily invested money and the accused did not induce by deception from the inception; mere breach of contract does not constitute cheating. (Paras 5-7) B) Indian Penal Code - Cheating - Section 420 IPC - Ingredients - For an offence of cheating, there must be deception from the very beginning; subsequent failure to fulfil promise does not amount to cheating. (Para 6) C) Indian Penal Code - Criminal Breach of Trust - Section 406 IPC - Ingredients - Entrustment of property must be with a dishonest misappropriation or conversion; mere failure to return money does not constitute criminal breach of trust. (Para 6)
Issue of Consideration
Whether the criminal proceedings arising out of an investment dispute, where the complainant invested money and the accused issued a cheque which was dishonoured, constitute a criminal offence or are purely civil in nature, warranting quashing under Section 482 Cr.P.C.
Final Decision
The court allowed the application and quashed the order dated 12th February 2014 in R.C.C. No. 1158 of 2013 and FIR C.R. No. 41 of 2014 registered with Ambad Police Station.
Law Points
- Inherent powers under Section 482 Cr.P.C.
- Quashing of FIR
- Civil dispute not to be criminalized
- Cheating ingredients
- Breach of contract vs. criminal offence
