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Judgment
The Criminal Petition has been filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for brevity ‘the BNSS’) by the Petitioner/Accused No.1 for granting of pre-arrest bail in connection with Crime No.02 of 2026 of CID Police Station, Mangalarigi, was registered for the alleged offences punishable under Sections 420, 409 read with 120(B) of the Indian Penal Code, 1860 (for brevity ‘the I.P.C’) and Section 13(2) of the Prevention of Corruption Act, 1988 (for brevity ‘the P.C. Act’).
Mr.D.Purna Chandra Reddy, the learned counsel for the Petitioner, submits that the Petitioner is innocent of the alleged offence and he has been falsely implicated by the Police. The Petitioner undertakes to strictly adhere to any conditions that may be imposed by this Court. Hence, it is urged to allow the Criminal Petition.
Per contra, A. Sai Rohit, the learned Assistant Public Prosecutor, vehemently opposed the grant of pre-arrest bail to the Petitioner, submitting that the investigation is still underway and several material witnesses remain to be examined. It is contended that if the Petitioner is released on anticipatory bail, there is a strong likelihood that he may abscond, thereby hampering the ongoing investigation and evading the process of law. Hence, it is urged to dismiss the Criminal Petition.
Heard the learned counsel for the Petitioner and the learned Assistant Public Prosecutor. Perused the record.
On perusal of the record, the Branch Manager of Bank of Baroda lodged a complaint against the Petitioner/Accused No.1 and his wife alleging that they had availed loans from the Bank and cheated the Bank by avoiding repayment of the loan amounts. The learned Assistant Public Prosecutor and the learned Counsel for the Petitioner submit that the Petitioner and his wife have repaid the entire loan amount and that a No Due Certificate was issued in favour of the wife of the Petitioner. However, the learned Counsel for the Petitioner submits that no such certificate was issued in favour of the Petitioner/Accused No.1 on the ground that a criminal case is pending against him.
Be that as it may, the CID, Mangalagiri, registered an F.I.R. against the Petitioner for the alleged offences punishable under Sections 420, 409 and 120-B of ‘the I.P.C.,’ and Section 13(2) of ‘the P.C.Act’. Since the Petitioner is not a public servant, the applicability of the provisions of the Prevention of Corruption Act against him is a matter that requires consideration during the course of investigation and trial. The Hon’ble Apex Court in Delhi Race Club (1940) Ltd v. State of Uttar Pradesh1 observed that the criminal breach of trust and cheating cannot go together.
The Hon’ble Apex Court in Delhi Race Club (1940) Ltd. v. State of U.P., supra at paragraph Nos.44 & 49 held as under:
“44.At the most, the Court of the Additional Chief Judicial Magistrate could have issued process for the offence punishable under Section 420IPC i.e. cheating but in any circumstances no case of criminal breach of trust is made out. The reason being that indisputably there is no entrustment of any property in the case at hand. It is not even the case of the complainant that any property was lawfully entrusted to the appellants and that the same has been dishonestly misappropriated. The case of the complainant is plain and simple. He says that the price of the goods sold by him has not been paid. Once there is a sale, Section 406IPC goes out of picture. According to the complainant, the invoices raised by him were not cleared. No case worth the name of cheating is also made out.
49.From the aforesaid, there is no manner of any doubt whatsoever that in case of sale of goods, the property passes to the purchaser from the seller when the goods are delivered. Once the property in the goods passes to the purchaser, it cannot be said that the purchaser was entrusted with the property of the seller. Without entrustment of property, there cannot be any criminal breach of trust. Thus, prosecution of cases on charge of criminal breach of trust, for failure to pay the consideration amount in case of sale of goods is flawed to the core. There can be civil remedy for the non-payment of the consideration amount, but no criminal case will be maintainable for it. [See : Lalit Chaturvedi v. State of U.P. [Lalit Chaturvedi v. State of U.P., (2024) 12 SCC 483 : 2024 SCC OnLine SC 171] and Mideast Integrated Steels Ltd. v. State of Jharkhand [Mideast Integrated Steels Ltd. v. State of Jharkhand, 2023 SCC OnLineJhar 301”
The Hon’ble Apex Court in Arshad Neyaz Khan v. State of Jharkhand2, at paragraph No.21 held as under:
“21.Furthermore, it is pertinent to mention that if it is the case of the complainant/respondent No. 2 that the offence of criminal breach of trust as defined under Section 405 IPC, punishable under Section 406 IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined in Section 415, punishable under Section 420 IPC. This Court in Delhi Race Club (1940) Limited v. State of Uttar Pradesh, (2024) 10 SCC 690 observed that there is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making false or misleading representation i.e. since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriates the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver a property. In such a situation, both offences cannot co-exist simultaneously. Consequently, the complaint cannot contain both the offences that are independent and distinct. The said offences cannot co-exist simultaneously in the same set of facts as they are antithetical to each other.”
Section 406 of ‘the I.P.C.,’ deals with criminal breach of trust, which presupposes lawful entrustment of property followed by dishonest misappropriation or conversion. In contrast, Section 420 of ‘the I.P.C.,’ addresses cheating and dishonestly inducing delivery of property, which requires deception at the inception of the transaction. Thus, while Section 406 of ‘the I.P.C.,’ arises from a breach of an existing fiduciary relationship, Section 420 of ‘the I.P.C.,’ is predicated upon fraudulent inducement at the very outset. The two offences, therefore, operate in distinct spheres.
10 Having regard to the facts and circumstances of the case, the gravity and nature of the allegations leveled against the Petitioner/Accused No.1, this Court is inclined to grant pre-arrest bail to the Petitioner/Accused No.1, with some stringent conditions.
In the result, the Criminal Petition is allowed with the following conditions:
In the event of his arrest, the Petitioner/Accused No.1 shall be enlarged on bail subject to his executing a bond for a sum of Rs.20,000/- (Rupees Twenty Thousand only) with two sureties each for the like sum each to the satisfaction of the arresting police officials;
The Petitioner/Accused No.1 shall make himself available for investigation as and when required;
The Petitioner/Accused No.1 shall appear before the Station House Officer concerned once in a week i.e., on every Saturday between 10.00 a.m. and 5.00 p.m., till filing of the Charge Sheet.
The Petitioner/Accused No.1 shall not leave the limits of the Andhra Pradesh without the express permission from the Station House Officer concerned.
The Petitioner/Accused No.1 shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court.
The Petitioner/Accused No.1 shall surrender his passport, if any, to the Investigating Officer. If he claims that he does not have passport, he shall submit an affidavit to that effect to the Investigating Officer.