Case Note & Summary
The petitioner, Vivek Vishwanath Kenge, was the original accused in a criminal case filed by Vishwam Power & Buildcon Pvt. Ltd. The respondent company alleged that the petitioner had agreed to purchase shares of the company for a total consideration of Rs. 5,00,000, paid an advance of Rs. 1,00,000, and issued a cheque for the balance of Rs. 4,00,000. The cheque was dishonoured upon presentation. The respondent company filed a complaint under Sections 406 and 420 of the Indian Penal Code, 1860 (IPC), and the learned Judicial Magistrate First Class, Latur, issued process against the petitioner on 28-07-2017 in R.C.C. No. 459 of 2015. The petitioner challenged this order by way of a criminal writ petition before the Bombay High Court, Aurangabad Bench. The court examined the allegations and found that the transaction was essentially a civil dispute regarding non-payment of money. There was no evidence of any dishonest intention on the part of the petitioner at the time of entering into the agreement or at the time of issuance of the cheque. The court noted that the ingredients of cheating under Section 420 IPC require deception from the inception, and for criminal breach of trust under Section 406 IPC, there must be entrustment of property and dishonest misappropriation. In this case, the petitioner had paid part of the consideration and issued a cheque for the balance, which indicated a genuine transaction. The dishonour of the cheque gave rise to a civil liability, not a criminal offence. The court held that the criminal proceedings were an abuse of the process of law and quashed the order of issuance of process and the proceedings in R.C.C. No. 459 of 2015. The petition was allowed, and rule was made absolute.
Headnote
A) Criminal Law - Cheating and Criminal Breach of Trust - Sections 406, 420 Indian Penal Code, 1860 - Quashing of Process - Dispute arose from a business transaction where the petitioner failed to pay the balance amount for purchase of shares and a cheque was dishonoured - The court held that the allegations did not disclose any dishonest intention at the inception or entrustment of property, and the matter was purely civil in nature - Held that the criminal process was an abuse of process of law and liable to be quashed (Paras 1-10).
Issue of Consideration
Whether the issuance of process against the petitioner for offences under Sections 406 and 420 of the Indian Penal Code, 1860 (IPC) was justified when the dispute essentially pertained to a civil liability arising from a business transaction.
Final Decision
The petition is allowed. The order of issuance of process dated 28-07-2017 passed by learned Judicial Magistrate First Class, Latur in R.C.C. No.459 of 2015 and the proceedings in R.C.C. No.459 of 2015 are quashed. Rule is made absolute.
Law Points
- Civil dispute not to be converted into criminal case
- breach of contract not cheating
- ingredients of Section 420 IPC
- ingredients of Section 406 IPC
- distinction between civil and criminal liability
