The genesis of the present appeal is from the impugned order pronounced by the High Court whereby it dismissed the application filed under Section 482 read with 401 Cr.P.C. What are the circumstances under which High Court can exercise its inherent powers under Section 482 Cr.P.C and the principles settled by judicial pronouncements laying down.
Vijay Kumar Ghai vs. State of West Bengal & Ors. [Crl. Appeal 403 of 2022]
Regarding section 482 a very widely celebrated judgment of State of Haryana & Ors. Vs. Bhajan Lal & Ors.1992 Supp (1) SCC 335 considered in detail the scope of the High Court powers under Section 482 Cr.P.C. and/or Article 226 of the Constitution of India to quash the FIR and referred to several judicial precedents and held that the High Court should not embark upon an inquiry into the merits and demerits of the allegations and quash the proceedings without allowing the investigating agency to complete its task. At the same time, this Court identified the following cases in which FIR/complaint can be quashed:
“102. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the 21 proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”
This Court in R.P. Kapur Vs. State of Punjab summarized categories of cases where inherent power can and should be exercised to quash the proceedings:-
(i) Where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction;
(ii) Where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
(iii) Where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
A two-Judge Bench of this Court in State of Madhya Pradesh Vs. Awadh Kishore Gupta & Ors. made the following observation :-
“11. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage.
SECTION 405 IPC: “Entrustment” of property under Section 405 of the Indian Penal Code, 1860 is pivotal to constitute an offence under this. The words used are, ‘in any manner entrusted with property’. So, it extends to entrustments of all kinds whether to clerks, servants, business partners or other persons, provided they are holding a position of ‘trust’. A person who dishonestly misappropriates property entrusted to them contrary to the terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of the Penal Code.
The definition in the section does not restrict the property to movables or immoveable alone. This Court in R K Dalmia vs Delhi Administration held that the word ‘property’ is used in the Code in a much wider sense than the expression ‘moveable property’.
CHEATING SECTION 415 IPC: The essential ingredients of the offense of cheating are:
1. Deception of any person
2. (a) Fraudulently or dishonestly inducing that person-
(i) to deliver any property to any person: or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were no so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body,mind,reputation or property.
A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating. To establish the offence of Cheating in inducing the delivery of property,
the following ingredients need to be proved:-
1. The representation made by the person was false
2. The accused had prior knowledge that the representation he made was false.
3. The accused made false representation with dishonest intention in order to deceive the person to whom it was made.
4. The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed.
There can be no doubt that a mere breach of contract is not in itself a criminal offence and gives rise to the civil liability of damages. However, as held by this court in Hridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr., the distinction between mere breach of contract and cheating, which is criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest intention is the basis of the offence of cheating.
The judgment gives introspection for assessment for Indian Legal practice regarding application of section 482 CrPC and also on check for practice of filing civil dispute under criminal to put more pressure. The usage of inherent power of this court has almost settled principle as laid down in Bhajan Lal judgment supra. Further, while evaluating the offence, court observed that there is fine line of difference between breach of trust and cheating. Not only this Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corporation vs. NEPC India Ltd & Ors. noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that:-
“13. …any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.”
