Case Note & Summary
The petitioner, Sanjaykumar Kasliwal, filed a Criminal Writ Petition under Article 226 of the Constitution of India seeking quashing of FIR No. 86 of 2017 registered at Kranti Chowk Police Station, Aurangabad, for offences under Sections 420, 406, 409, 467, 468, 471, 120-B of the Indian Penal Code and Section 138 of the Negotiable Instruments Act. The FIR was lodged by respondent No. 3, Nooruddin Charniya, alleging that the petitioner had borrowed Rs. 25 lakhs from him and issued two cheques which were dishonoured. The petitioner contended that the dispute was purely civil in nature and that the FIR was an abuse of process. The court examined the allegations and found that the loan was taken in 2014 and the cheques were issued in 2016, indicating no initial dishonest intention. The court held that the essential ingredients of cheating under Section 420 IPC were not made out as there was no deception from the inception. The court also noted that the remedy for cheque dishonour lies under Section 138 of the NI Act, which is a civil liability. Consequently, the court quashed the FIR and all proceedings arising therefrom.
Headnote
A) Criminal Law - Cheating - Section 420 IPC - Dishonest Inducement - For an offence under Section 420 IPC, the deception must be from the inception of the transaction; mere failure to pay after cheque dishonour does not constitute cheating - The court quashed the FIR as the dispute was purely civil in nature, arising from dishonour of cheques issued for repayment of a loan, and there was no evidence of dishonest inducement at the time of borrowing (Paras 7-10).
B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 NI Act - Civil Remedy - Dishonour of a cheque for repayment of a loan gives rise to a civil liability and a statutory remedy under Section 138 of the NI Act, but does not automatically constitute criminal offences under IPC - The court held that the complainant had an alternative remedy under the NI Act and the FIR was an abuse of process (Paras 7-10).
Issue of Consideration
Whether the FIR under Section 420 IPC and other provisions can be quashed when the dispute is essentially of a civil nature arising from dishonour of cheques issued for repayment of a loan.
Final Decision
The court allowed the petition and quashed FIR No. 86 of 2017 registered at Kranti Chowk Police Station, Aurangabad, and all proceedings arising therefrom.
Law Points
- Section 420 IPC requires dishonest inducement from inception
- Section 138 NI Act is a civil remedy
- breach of contract not criminal offence
- quashing of FIR when no prima facie case
Case Details
2017 LawText (BOM) (04) 59
Criminal Writ Petition No. 263 of 2017
S.S. Shinde, K.K. Sonawane
A.S. Bajaj, S.P. Deshmukh, A.S. Gandhi, M.D. Narwadkar
Sanjaykumar S/o Suganchand Kasliwal
The State of Maharashtra, Police Station Incharge Kranti Chowk, Nooruddin Sher Mohammad Charniya, Head Constable Economy Offence Cell, Branch Manager HDFC Bank
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Nature of Litigation
Criminal Writ Petition under Article 226 of the Constitution of India seeking quashing of FIR.
Remedy Sought
Petitioner sought quashing of FIR No. 86 of 2017 and all proceedings arising therefrom.
Filing Reason
The petitioner alleged that the FIR was lodged maliciously and the dispute was purely civil in nature, arising from dishonour of cheques issued for repayment of a loan.
Issues
Whether the FIR under Sections 420, 406, 409, 467, 468, 471, 120-B IPC and Section 138 NI Act can be quashed when the dispute is essentially of a civil nature.
Whether the ingredients of cheating under Section 420 IPC are made out in the absence of dishonest inducement from the inception of the transaction.
Submissions/Arguments
Petitioner argued that the loan was taken in 2014 and cheques were issued in 2016, showing no initial dishonest intention; the remedy lies under Section 138 NI Act which is civil in nature.
Respondent No. 3 argued that the petitioner had dishonest intention from the beginning and the FIR disclosed a prima facie case.
Ratio Decidendi
For an offence under Section 420 IPC, the deception must be from the inception of the transaction; mere failure to pay after dishonour of cheques does not constitute cheating. The dispute being civil in nature, the FIR was an abuse of process and liable to be quashed.
Judgment Excerpts
The essential ingredients of the offence of cheating under Section 420 IPC are: (i) deception of any person; (ii) fraudulently or dishonestly inducing that person to deliver any property; (iii) the person so deceived must have been induced to deliver property or to do something which he would not otherwise do. In the present case, there is no allegation that the petitioner had dishonest intention from the inception of the transaction.
The dispute is purely civil in nature and the remedy lies under Section 138 of the Negotiable Instruments Act. The FIR is an abuse of process of law.
Procedural History
The petitioner filed Criminal Writ Petition No. 263 of 2017 before the Bombay High Court (Aurangabad Bench) seeking quashing of FIR No. 86 of 2017. The petition was reserved on 12th April 2017 and pronounced on 20th April 2017.
Acts & Sections
- Indian Penal Code, 1860 (IPC): 420, 406, 409, 467, 468, 471, 120-B
- Negotiable Instruments Act, 1881 (NI Act): 138
- Constitution of India, 1950: 226
