CR.A/412/2012 on 15 October 2026

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 412 of 2012 Reserved on: 07.10.2026 Date of Decision: 15.10.2026. Kashmiru & Others ...Appellants Versus Jagdish Chand ...Respondent

Coram

Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 No

For the Appellants : Mr Ramesh Sharma,

Advocate. For the respondent/State : Mr Imran Khan, Advocate. Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 01.06.2012 passed by learned Judicial Magistrate First Class, Kandaghat, District Solan, H.P. (learned Trial Court) vide which the respondent (accused before the learned Trial Court) was acquitted of the commission of offences punishable under Sections 420 and 423 of the Indian Penal Code (IPC). (The

Whether reporters of Local Papers may be allowed to see the judgment? Yes.

parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).

2. Briefly stated, the facts giving rise to the present appeal are that the complainants presented a complaint before the learned Trial Court against the accused for the commission of offences punishable under Sections 420 and 423 of the Indian Penal Code (IPC). It was asserted that the complainants were the owners of the land measuring 52 bighas, 18 biswas located in village Lachhog, Pargana Bharoli, Tehsil Kandaghat, District Solan, H.P. They were unable to take care of the land and they requested the accused Jagdish Chand to look after and manage the property. They appointed Jagdish Chand as their General Power of Attorney on 24.04.2006. The accused agreed to sell the land to Anil Bhardwaj on 11.07.2006 for ₹60,00,000/-. Anil Bhardwaj issued a cheque of ₹12,00,000/- towards the part payment of the sale consideration. The sale deed was to be executed within 6 months. However, the accused sold the land to Smt. Monika Gupta for ₹12,00,000/- only on 04.11.2006, contrary to the terms and conditions of the agreement with Anil Bhardwaj. The complainant cancelled their General Power of Attorney on 09.11.2006. They also issued a legal notice to the accused informing him about the cancellation of the General Power of Attorney. The accused cheated the complainant by executing the sale deed in favour of Monika Gupta. Therefore, it was prayed that action be taken against the accused as per the law.

3. The learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused. When the accused appeared, he was charged with the commission of offences punishable under Sections 420 and 423 of IPC, to which he pleaded not guilty and claimed to be tried.

4. The complainants examined K.S. Pathania (CW1), Anil Bhardwaj (CW2), Leela (CW3), Hema Nand (CW4) and complainant no. 2 Satya Devi (CW5) to prove their complaint.

5. The accused, in his statement recorded under Section 313 of the Code of Criminal Procedure (CrPC), admitted that the complainants are the owners of the land measuring 52 bighas 12 biswas, they had appointed him as a General Power of Attorney, which was duly registered with the Sub-Registrar, Shimla, he had agreed to sell the complainants' land to Anil

Bhardwaj for a consideration of ₹60,00,000/- and that Anil Bhardwaj had issued a cheque of ₹12,00,000/- towards the payment of part of the sale consideration. He stated that the cheque was dishonoured and Anil Bhardwaj was asked to make the payment to get the sale deed executed. However, Anil Bhardwaj refused. Hence, the sale deed was executed in favour of Smt. Monika Gupta with the complainants’ consent. He did not produce any evidence in his defence.

6. Learned Trial Court held that the complaint appeared to have been filed by the complainants at the instance of Anil Bhardwaj, who was aggrieved by the non-execution of the sale deed in his favour. The complainants had duly appointed the accused as their General Power of Attorney, and he had the authority to execute the sale deed on their behalf. The ingredients of cheating were not satisfied. Therefore, the complaint was dismissed.

7. Being aggrieved by the judgment passed by the learned Trial Court, the complainants have filed the present appeal asserting that the learned Trial Court erred in acquitting the accused. The learned Trial Court could have framed an alternative charge against the accused for the commission of an offence punishable under Section 406 of the IPC because he had not paid the money received by him from Monika Gupta to the complainants. The earlier sale deed was to be executed for ₹60,00,000/-, whereas the sale deed in favour of Monika Gupta was executed for only ₹12,00,000/-. This caused a substantial loss to the complainants. The accused breached the trust reposed upon him by the complainants by executing a sale deed for a lesser consideration. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

8. I have heard Mr Ramesh Sharma, learned counsel for the appellants/complainants and Mr Imran Khan, learned counsel for the respondent/accused.

9. Mr Ramesh Sharma, learned counsel for the appellants/complainants, submitted that the learned Trial Court erred in acquitting the accused. It was duly proved that the accused had entered into an agreement to sell with Anil Bhardwaj and had not executed any sale deed in his favour. The accused executed a sale deed in favour of Monika Gupta for

₹12,00,000/-, which was substantially less than the sale consideration agreed with Anil Bhardwaj. Learned Trial Court erred in holding that the cheating was not proved. Hence, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

10. Mr Imran Khan, learned counsel for the respondent/accused, submitted that the ingredients of cheating were not satisfied. There is no averment that the accused had made any false representation to the complainants which induced the complainants to deliver any property to the accused. Non-execution of the sale deed in favour of Anil Bhardwaj cannot amount to any cheating. Therefore, he prayed that the present appeal be dismissed.

11. I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

12. The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Sanjay Kumar v. State of Bihar, 2026 SCC OnLine SC 1373, that the Court can interfere with a judgment of acquittal only if it is impossible, perverse, wholly unsustainable, or manifestly illegal. It was observed: Scope of interference with an acquittal:

26. At the outset, it is necessary to remind ourselves of the settled principles governing interference with an order of acquittal. An accused is presumed innocent until proven guilty. When a court of competent jurisdiction acquits the accused, the presumption of innocence is not weakened but reinforced. Where such acquittal is affirmed by the High Court, the caution to be exercised by this Court under Article 136 is even greater.

27. In Kali Ram v. State of Himachal Pradesh (1973) 2 SCC 808: 1973 SCC (Cri) 1048, this Court explained the golden thread running through criminal jurisprudence in the following words: “25. Another golden thread which runs through the web of the administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favourable to the accused should be adopted. This principle has a special relevance in cases wherein the guilt of the accused is sought to be established by circumstantial evidence. A rule has accordingly been laid down that unless the evidence adduced in the case is consistent only with the hypothesis of the guilt of the accused and is inconsistent with that of his innocence, the Court should refrain from recording a finding of guilt of the accused. It is also an accepted rule that in case the Court entertains reasonable doubt regarding the guilt of the accused, the accused must have the benefit of that doubt. Of course, the doubt regarding the guilt of the accused should be reasonable; it is not the doubt of a mind which is either so vacillating that it is incapable of reaching a firm conclusion or so timid that it is hesitant and afraid to take things to their natural consequences. The rule regarding the benefit of doubt also does not warrant acquittal of the accused by resort to surmises, conjectures or fanciful considerations. As mentioned by us recently in the case of State of Punjab v. Jagir Singh, a criminal trial is not like a fairy tale wherein one is free to give flight to one's imagination and fantasy. It concerns itself with the question as to whether the accused arraigned at the trial is guilty of the offence with which he is charged. Crime is an event in real life and is the product of the interplay of different human emotions. In arriving at the conclusion about the guilt of the accused charged with the commission of a crime, the Court has to judge the evidence by the yardstick of probabilities, intrinsic worth and the animus of witnesses. Every case in the final analysis would have to depend upon its own facts. Although the benefit of every reasonable doubt should be given to the accused, the Courts should not at the same time reject evidence which is ex facie trustworthy on grounds which are fanciful or in the nature of conjectures.”

28. The decision in Kali Ram (supra) further cautions that wrongful acquittal and wrongful conviction do not stand on the same footing, for conviction of an innocent person causes grave injustice and shakes public confidence in the administration of criminal justice. The rule of benefit of doubt, therefore, is not a technical rule; it is a substantive safeguard flowing from the presumption of innocence.

29. In Ghurey Lal v. State of Uttar Pradesh (2008) 10 SCC 450: (2009) 1 SCC (Cri) 60, this Court reiterated the limited scope of interference with acquittals. This Court observed: “75. The Trial Court has the advantage of watching the demeanour of the witnesses who have given evidence; therefore, the appellate court should be slow to interfere with the decisions of the Trial Court. An acquittal by the Trial Court should not be

interfered with unless it is totally perverse or wholly unsustainable.”

30. The decision in Ghurey Lal (supra) also crystallised certain propositions: first, there is a double presumption of innocence in favour of an acquitted accused; secondly, if two views are possible, the view favourable to the accused must prevail; thirdly, though the appellate court has the power to reappreciate evidence, it should interfere only when the acquittal is manifestly illegal, perverse or results in miscarriage of justice; and fourthly, due weight must be given to the Trial Court's findings, particularly because the trial judge had the advantage of observing the demeanour of witnesses.

31. In Chandrappa v. State of Karnataka (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325, this Court held that though the appellate court has full power to review and reappreciate the evidence, the presumption of innocence is strengthened by an order of acquittal. It was held that when two reasonable conclusions are possible on the basis of evidence on record, the appellate court should not disturb the finding of acquittal.

32. The same principle was restated in Mrinal Das v. State of Tripura (2011) 9 SCC 479, wherein this Court held that an order of acquittal is to be interfered with only when there are compelling and substantial reasons for doing so. If two reasonable views are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal.

33. Therefore, the question before us is not whether another view on the evidence is possible. The question is whether the view taken by the Trial Court and affirmed by the High Court is impossible, perverse, wholly unsustainable, or manifestly illegal. Having examined the record, we are unable to hold so.

13. The present appeal is to be decided as per the parameters laid down by the Hon’ble Supreme Court.

14. The complaint was filed for the commission of an offence punishable under Section 420 of IPC. The ingredients of cheating were explained by the Hon’ble Supreme Court in S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241, as under: “10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.

11. One of us (D.P. Mohapatra, J.), speaking for the Bench, in Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC 168: 2000 SCC (Cri) 786] on the facts of that case, has expressed thus: (SCC p. 177, para 15) “15. In determining the question, it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement, which may be judged by his subsequent conduct, but for this, subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating, it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up a promise, subsequently, such a culpable intention right at the beginning, that is, when he made the promise, cannot be presumed.” (emphasis supplied)

12. Finding that the ingredients of the offence of cheating and its allied offences had not been made out, this Court interfered with the order of the High Court and quashed the criminal proceedings.

13. In G.V. Rao v. L.H.V. Prasad [(2000) 3 SCC 693: 2000 SCC (Cri) 733], this Court in para 7 has stated thus: (SCC pp. 696-97) “7. As mentioned above, Section 415 has two parts. While in the first part, the person must ‘dishonestly’ or ‘fraudulently’ induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay [AIR 1956 SC 575: 1956 Cri LJ 1116], a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure the conviction of a person for the offence of cheating, ‘mens rea’ on the part of that person must be established. It was also observed in Mahadeo Prasad v. State of W.B. [AIR 1954 SC 724: 1954 Cri LJ 1806] that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.” (emphasis supplied)

14. In Trisuns Chemical Industry v. Rajesh Agarwal [(1999) 8 SCC 686: 2000 SCC (Cri) 47] dealing with the effect of existence of arbitration clause in the agreement on criminal prosecution on the ground that civil proceedings are also maintainable, this Court has held that quashing of FIR or a complaint exercising power under Section 482 CrPC should be limited to a very extreme exception; merely because an act has a civil profile is not enough to stop action on the criminal side. It is further held that a provision made in the agreement for referring the disputes to arbitration is not an effective substitute for a criminal prosecution when the disputed act constitutes a criminal offence.

15. A similar view was taken in G.V. Rao v. L.H.V. Prasad, (2000) 3 SCC 693, as under: “4. Cheating” is defined in Section 415 of the Penal Code, 1860, which provides as under: “415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not 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, is said to ‘cheat’. Explanation.—A dishonest concealment of facts is a deception within the meaning of this section.”

5. The High Court quashed the proceedings principally on the ground that Chapter XVII of the Penal Code,

1860, deals with the offences against property and, therefore, Section 415 must also necessarily relate to the property which, in the instant case, is not involved and, consequently, the FIR was liable to be quashed. The broad proposition on which the High Court proceeded is not correct. While the first part of the definition relates to property, the second part does not necessarily relate to property. The second part is reproduced below: “415. … intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not 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, is said to ‘cheat’.”

6. This part speaks of intentional deception which must be intended not only to induce the person deceived to do or omit to do something but also to cause damage or harm to that person in body, mind, reputation or property. The intentional deception presupposes the existence of a dominant motive of the person making the inducement. Such inducement should have led the person deceived or induced to do or omit to do anything which he would not have done or omitted to do if he were not deceived. The further requirement is that such an act or omission should have caused damage or harm to body, mind, reputation or property.

7. As mentioned above, Section 415 has two parts. In the first part, the person must “dishonestly” or “fraudulently” induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay [AIR 1956 SC 575: 1956 Cri LJ 1116: 1956 SCR 483], a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure the conviction of a person for the offence of cheating, “mens rea” on the part of that person must be established. It was also observed in Mahadeo Prasad v. State of W.B. [AIR 1954 SC 724: 1954 Cri LJ 1806] that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.

8. Thus, so far as the second part of Section 415 is concerned, “property”, at no stage, is involved. Here, it is the doing of an act or omission to do an act by the complainant, as a result of intentional inducement by the accused, which is material. Such inducement should result in the doing of an act or omission to do an act as a result of which the person concerned should have suffered or was likely to suffer damage or harm to body, mind, reputation or property. In an old decision of the Allahabad High Court in Empress v. Sheoram [(1882) 2 AWN 237], it was held by Mahmood, J.: “That to palm off a young woman as belonging to a caste different to the one to which she really belongs, with the object of obtaining money, amounts to the offence of cheating by personation as defined in Section 416 of the Penal Code, 1860, which must be read in the light of the preceding Section 415.”

16. Similar is the judgment in V.Y. Jose v. State of Gujarat, (2009) 3 SCC 78, wherein it was observed: - “14. An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied:

(i) deception of a person either by making a false or misleading representation or by other action or omission;

(ii) fraudulently or dishonestly inducing any person to deliver any property, or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intentions at the time of making a promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making the initial promise being absent, no offence under Section 420 of the Penal Code can be said to have been made out.”

17. This position was reiterated in Raju Krishna Shedbalkar v. State of Karnataka, 2024 SCC OnLine SC 200, wherein it was observed: “7. A perusal of the aforesaid provision shows that the offence of cheating is in two parts. The first is where a person fraudulently or dishonestly deceives another in inducing that person to deliver any property to any person, etc. The second part of the offence would be made out if somebody is deceived to do an act which causes damage or harm to that person, “in body, mind, reputation or property, " and is said to have cheated. Time and again, this Court has reiterated that in order to make out an offence under cheating, the intention to cheat or deceive should be right from the beginning. By no stretch of the imagination, this is even reflected in the complaint made by the informant.

8. In the case of Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168, this Court held as under: “15. In determining the question, it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement, which may be judged by his subsequent conduct, but for this, subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore, it is the intention that is the gist of the offence. To hold a person guilty of cheating, it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up a promise, subsequently, such a culpable intention right at the beginning, that is, when he made the promise, cannot be presumed.”(Emphasis supplied)

9. Further, in the case of Indian Oil Corporation v. NEPC India Ltd. (2006) 6 SCC 736, this position was reiterated in the following manner:

33. The High Court has held that a mere breach of contractual terms would not amount to cheating unless the fraudulent or dishonest intention is shown right at the beginning of the transaction, and in the absence of an allegation that the accused had a fraudulent or dishonest intention while making a promise, there is no “cheating”. The High Court has relied on several decisions of this Court wherein this Court has held that dishonest intent at the time of making the promise/inducement is necessary, in addition to the subsequent failure to fulfil the promise. Illustrations (f) and (g) to Section 415 make this position clear: “(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.

(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery, A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.”(emphasis supplied).

18. A similar view was taken in G. Saminathan v. State, 2026 SCC OnLine SC 1460 wherein it was observed:

7.2. For the invocation of Section 420 of IPC, which provides for cheating and dishonestly inducing the delivery of property, the ingredients of Section 415 of IPC have to be established. To constitute the offence under Section 415 of IPC, it is essential that, by way of certain acts, a fraudulent or dishonest inducement is made and the person so deceived was made to deliver any property on account of such inducement. The said provision lays down two separate classes of acts which the person deceived may be induced to do, as follows:

i) In the first class of acts he may be induced fraudulently or dishonestly to deliver the property to any person or consent that any person shall retain any property.

ii) The second class of acts set forth in the Section is the intentional inducement of doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived.

7.3. While explaining the contours of the said provision, this Court in Deepak Gaba v. State of U.P., (2023) 3 SCC 423 : (2023) 1 SCC (Cri) 714 observed that the sine qua non of Section 415 of IPC is “fraudulence”, “dishonesty”, or

“intentional inducement” and that the absence of the said elements would debase the offence of cheating.

19. In the present case, the complainants have nowhere mentioned in the complaint that the accused had made any fraudulent or dishonest inducement to them and they were led to deliver any property to the accused which they would not have but for the representation so made by him. Satya Devi (CW5) stated that the complainants had executed a General Power of Attorney in favour of the accused for looking after the property. Thus, the complainants had appointed the accused as their General Power of Attorney voluntarily without any inducement from him, and the essential ingredients of the commission of an offence punishable under Section 420 of the IPC were not satisfied.

Satya Devi (CW5) stated that the accused entered into an agreement with Anil Bhardwaj for selling the land for ₹60,00,000/-. However, the accused executed a sale deed in favour of Monika Gupta for ₹12,00,000/-. The sale was made for a lesser amount. It was submitted that the accused had cheated the complainants by selling the land for lesser consideration. This submission is only stated to be rejected.

There is no evidence of any representation made to the complainants that the sale would be made for ₹ 60,00,000/-, and the complainants agreeing to part with the property based on such a representation. They had already executed the General Power of Attorney in favour of the accused and any sale made after the execution of the General Power of Attorney may give rise to a civil action but will not give rise to a complaint for cheating in the absence of the fraudulent representation.

21. The complaint was also filed for the commission of an offence punishable under Section 423 of the IPC. But again, dishonest or fraudulent intention is required for proving this offence. It is not the case of the complainants that the accused was not their Power of Attorney. Therefore, the accused had the authority to execute a sale deed, and no offence punishable under Section 423 would be made out by the execution of the sale deed in favour of Monika Gupta.

22. It was submitted that the learned Trial Court should have framed an alternative charge for the commission of an offence punishable under Section 406 of the IPC. This submission is only stated to be rejected. The complainants had filed the complaint for the commission of an offence punishable under Section 420 of the IPC and the learned Trial Court had framed the charges based upon the averments made in the complaint. The complainants were within their rights to file an application for alteration of the charge or framing of the alternative charge before the learned Trial Court, but no such application was filed, and it is difficult to see how the learned Trial Court can be faulted for doing something which it was never required to do.

23. No other point was urged.

24. In view of the above, the present appeal fails and is dismissed. Pending applications, if any, also stand disposed of.

25. In view of the provisions of Section 437 A of the Code of Criminal Procedure (Section 481 of Bhartiya Nagarik Suraksha Sanhita, 2023) the respondent is directed to furnish bail bond in the sum of ₹50,000/- with one surety of the like amount to the satisfaction of the learned Registrar (Judicial) of this Court/learned Trial Court, which shall be effective for six months with a stipulation that in the event of a Special Leave

Petition being filed against this judgment or on grant of the leave, the respondent on receipt of notice thereof shall appear before the Hon'ble Supreme Court.

26. A copy of the judgment, along with the record of the learned Trial Court, be sent back forthwith.

(Rakesh Kainthla)

Judge 15th October, 2026 (Nikita)