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Judgment
J. Sreenivas Rao, J
This Criminal Petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (for short, ‘Cr.P.C.’) by the petitioner/accused seeking to quash the proceedings in C.C. No.6035 of 2022 on the file of the I Additional Metropolitan Magistrate, Cyberabad at Malkajgiri.
Heard Sri P.Giri Krishna, learned counsel for the petitioner, Sri Gaddam Srinivas, learned counsel for respondent No.2, and Sri M.Vivekananda Reddy, learned Assistant Public Prosecutor, appearing on behalf of respondent No.1-State.
Brief facts of the case:
3.1. The complainant Sri V.K. Johny filed a private complaint before the I Additional Metropolitan Magistrate at Malkajgiri on 26.05.2022 alleging that the accused had borrowed a total amount of Rs.12,50,000/- on various occasions, namely Rs.5,00,000/- on 11.02.2019, Rs.3,00,000/- on 04.04.2019, Rs.2,00,000/- on 14.05.2019 and Rs.2,50,000/- on 21.08.2019, and on each time he executed promissory notes and deposited the original sale deed document bearing No. 24299 of 2018, as security, with an agreement to pay 2% monthly interest. The accused initially paid interest but failed to repay the principal amount. Despite repeated demands, he issued three cheques in January 2022 for an amount of Rs.5,00,000/-, Rs.3,00,000/- and Rs.2,50,000/-, which were never encashed. On 11.03.2022, the accused executed an acknowledgment on a Rs.50/- stamp paper promising to settle Rs.12,36,000/- on or before 14.04.2022. Instead of fulfilling the said promise, he lodged a complaint at P.S. Kushaiguda against the complainant and threatened to implicate him in false cases.
3.2. Acting on the grievance of the complainant, the learned Magistrate referred the matter under Section 156(3) Cr.P.C., to the Neredmet Police and the same was registered as Crime No. 562 of 2022 for offences punishable under Sections 406, 420 and 506 IPC, and after investigation a charge sheet was filed on 30.07.2022 before the Court of the I Additional Metropolitan Magistrate, Cyberabad at Malkajgiri, and the same was numbered as C.C. No. 6035 of 2022.
Submissions of learned counsel for the petitioner:
4.1 Learned counsel submitted that the petitioner has not committed any offence and he was falsely implicated in the present case. He further submitted that respondent No.2 filed a private complaint before the I Additional Metropolitan Magistrate, Cyberabad at Malkajgiri, and the learned Magistrate, without verifying the allegations made in the complaint and without assigning any reasons, referred the matter to the police. Basing upon the same, a case in Crime No.562 of 2022
was registered by the Police, Neredmet P.S. The Investigating Officer, without properly conducting investigation, filed charge sheet and the learned Magistrate without assigning any reasons taken cognizance and the same is contrary to law. Even according to the allegations made in the complaint and in the charge sheet, the ingredients of Sections 406, 420 and 506 of IPC does not attract against the petitioner.
4.2 He further submitted that the petitioner had executed promissory notes while availing the hand loan from respondent No.2, and also deposited the original sale deed pertaining to his property towards security. The petitioner has repaid the entire amount, out of which, an amount of Rs.10,24,622/- was paid through online from 09.04.2019 to 24.02.2022 to respondent No.2. However, respondent No.2 lodged a private complaint on 26.05.2022 for Rs.12,36,000/- and with the same allegations he also filed a suit in O.S.No.598 of 2022, on the file of the Junior Civil Judge, Medchal-Malkajgiri District and the same is pending.
4.3 He also submitted that there is no allegation against the petitioner in the complaint that he availed the loan with a dishonest intention and the property document which was pledged by him towards security, is not genuine. Hence, the initiation of criminal proceedings against the petitioner is a clear abuse of the process of law. In support of his contention, he relied upon a judgment of the Hon’ble Apex Court in Vesa Holdings (P) Limited v. State of Kerala (2015) 8 SCC 293.
Submissions of learned counsel for respondent No.2:
5.1 Learned counsel for respondent No.2 submitted that the petitioner borrowed a total amount of Rs.22,60,622/- from respondent No.2. In spite of repeated demands, he failed to repay the said amount and shown his dishonest intention and when respondent No.2 visited the petitioner’s house for demanding money, he threatened him and also warned him that if respondent No.2 demands the amount, he will file a case against him.
5.2 He further submitted that there are specific allegations against the petitioner in the complaint. The Investigating Officer after recording the statements of the witnesses filed charge sheet, wherein the role of the petitioner was specifically mentioned to attract the offences punishable under Sections 406, 420 and 506 of IPC. The allegations made in the complaint in C.C.No.6035 of 2022 and the relief sought in O.S.No. 598 of 2022, are different and distinct. Basing on the pendency of the civil suit in respect of the other amount, the petitioner is not entitled to seek quashing of the proceedings in the present criminal petition.
5.3 He also submitted that the petitioner has raised several disputed facts in the present petition and the same have to be decided after full-fledged trial only and there are no grounds to quash the proceedings against the petitioner in C.C.No.6035 of 2022.
Analysis:
Having considered the rival submissions made by the respective parties and after perusal of the material available on record, it reveals that the petitioner availed hand loan from respondent No.2 and executed promissory notes and also deposited his original sale deed bearing document No.24299 of 2018 towards security. According to the averments of the complaint, the petitioner is due an amount of Rs.12,36,000/- and he executed acknowledgment on Rs.50/- non-judicial stamp paper promising to pay the above said amount on or before 14. 02.2022. However, the said amount was not paid. Hence, respondent No.2 filed a private complaint on 26. 05.2022 and the learned Magistrate referred the same to the police. Basing on the same, Crime No.562 of 2022 was registered by Neredmet Police and the Investigating Officer filed charge sheet and the same was taken cognizance by the learned Magistrate and it was numbered as C.C.No.6035 of 2022. According to the petitioner, he paid an amount of Rs.10,24,622/- on various occasions from 09.04.2019 to 24.02.2022 to respondent No.2.
The record reveals that respondent No.2 filed a suit in O.S.No.598 of 2022 before the Junior Civil Judge, Medchal-Malkajgiri District, for recovery of the very same amount of Rs.12,36,000/- and the said suit is pending. During the course of hearing, learned counsel for the petitioner submitted that the petitioner filed written statement denying the averments made in the suit and he had already paid the entire amount claimed in the above said suit. Hence, this Court is of the considered view that whether the petitioner had paid the entire amount and whether he is liable to pay the amount claimed by respondent No.2 has to be adjudicated in the above pending suit.
Insofar as the contention raised by the learned counsel for respondent No.2 that the petitioner is due an amount of Rs.22,60,622/- and the allegations made in the complaint and the relief sought in the suit are different are concerned, respondent No.2 has not stated in the complaint dated 26.05.2022 that the petitioner is due an amount of Rs.22,60,622/-. He specifically made an allegation that the petitioner is due an amount of Rs.12,36,000/- and he had executed an acknowledgment on a Rs.50/- non-judicial stamp paper promising to pay the said amount towards full and final settlement, and he had agreed to pay the same on or before 14.02.2022. However, he has not repaid the said amount.
It is pertinent to mention that there is no specific allegation against the petitioner that he borrowed the amounts from respondent No.2 with a dishonest intention and committed cheating. On perusal of the complaint, dated 26.05.2022, it reveals that respondent No.2 has given hand loans to the petitioner on 11.02.2019, 4.04.2019, 14.05.2019 and 21.08.2019 on executing the promissory notes and respondent No.2 had deposited the original sale deed bearing No.24299 of 2018 towards security. According to the learned counsel for the petitioner, the value of the secured property is more than One Crore rupees and it is not the case of respondent No.2 that the document which was deposited with respondent No.2 towards security is not genuine and there is cloud on the said property and also value of the property is less than the due amount to him.
In Vesa Holdings (P) Limited (supra), the Hon’ble Supreme Court held that not every breach of contract amounts to cheating. Cheating is made out only when there is fraudulent or dishonest intention at the very beginning, at the time of making the promise or representation. If such intention arises later, it cannot be treated as cheating under Section 420 IPC. Even if civil remedies are available, that alone is not a ground to quash criminal proceedings; however, if the allegations do not show dishonest intention from the inception, then no offence of cheating is disclosed. Continuing investigation in such cases would be an abuse of process, and courts should exercise powers under Section 482 Cr.P.C. to quash proceedings where complaints are mala fide or fail to disclose a criminal offence.
It is a trite law that in order to constitute the offence of cheating under Section 420 IPC, there must be fraudulent or dishonest intention at the very inception of the transaction. The Hon’ble Supreme Court in State of Haryana v. Bhajan Lal (1992)1 SCC 335, held that where the dispute between parties is predominantly civil in nature, giving it
a criminal colour would amount to abuse of the process of law. It has further been laid down that when payments are made from time to time and the grievance essentially pertains to recovery of money, the remedy lies in civil proceedings and not in criminal prosecution.
Examining the present case in light of these settled principles, it becomes clear that both the complaint and the civil suit arise from the very same set of allegations namely, payment of money said to be due by the petitioner to respondent No.2. The petitioner had deposited the original sale deed as security and also made some payments from 09.04.2019 to 24.02.2022. The dispute, therefore, is essentially civil in nature and already respondent No.2 filed a civil suit in O.S. No.598 of 2022 and the same is pending.
Hence, this Court is of the considered view that continuation of the proceedings i.e. C.C.No.6035 of 2022, on the file of the I Additional Metropolitan Magistrate, Cyberabad at Malkajgiri, against the petitioner, would amount to abuse of the process of law.
For the foregoing reasons as well as the principles laid down by the Hon’ble Apex Court in Bhajan Lal (supra) and Vesa Holdings (P) Limited (supra), this Court is inclined to exercise the powers conferred under the provisions of Section 482 of Cr.P.C., to quash the proceedings against the petitioner.
In the result, the criminal petition is allowed. The proceedings against the petitioner in C.C.No.6035 of 2022, on the file of I Additional Metropolitan Magistrate, Cyberabad at Malkajgiri, are hereby quashed. It is made clear that any of the observations made in this order are confined for the purpose of deciding this case only.
As a sequel thereto, miscellaneous applications, if any, pending in this petition stand closed.