VIJAY KUMAR GHAI & ORS. versus THE STATE OF WEST BENGAL & ORS. on 22 March 2022

SUPREME COURT REPORTS

[2022] 1 S.C.R.

AVIJAY KUMAR GHAI & ORS.

v.

THE STATE OF WEST BENGAL & ORS.

(Criminal Appeal No. 463 of 2022)

BMARCH 22, 2022

[S. ABDUL NAZEER AND KRISHNA MURARI, JJ.]

Code of Criminal Procedure, 1973: s. 482 – Quashing ofcomplaint – Appellant No. 1 is the Managing Director of the PublicLimited Company and Appellant Nos.2 and 3 are the Directors ofCthe said Company –The company itself has been arrayed as proformaRespondent No.3 – In January 2008, Respondent No. 2, anauthorized representative of SMC Global Securities Ltd, Delhidesired to make an investment on its behalf with the appellants –Itwas mutually decided between the parties that Respondent No. 2Dwill invest an amount of Rs. 2.5 crore with the company in lieu ofwhich they will be issued 2,50,000 equity shares of the company(Respondent No. 3) – Subsequently, Respondent No. 2 filed shareapplication form along with the cheque of Rs. 2.5 crore – Anallotment letter was issued in favour of Respondent No. 2 whereby2,50,000 shares were issued in lieu of the investment made by him –EThe proforma Respondentno.3 and Respondent No.2 arrived at anunderstanding, regarding the investment made by Respondent No.2. – Having failed to bring the IPO as per memorandum ofunderstanding, Respondent No.2 issued a legal notice to theAppellants, who duly replied to the legal notice denying all theFallegations contained in the legal notice – Respondent No. 2 filed apolice complaint in New Delhi – Respondent No. 2 filed a secondcomplaint underss.406, 409, 420, 468,120B and 34 IPC on the basisof the same cause of action at Kolkata and the same was convertedinto FIR under ss.406, 420, 120B IPC –High Court of Calcutta byimpugned judgment dismissed the quashing as well as the revisionGpetition filed by the Appellants – Hence instant appeal – Held: Therecan be no doubt that a mere breach of contract is not in itself acriminal offence and gives rise to the civil liability of damages –While breach of contract cannot give rise to criminal prosecution,for cheating, fraudulent or dishonest intention is the basis of the H

offence of cheating – In the case at hand, complaint filed by theRespondent No. 2 does not disclose dishonest or fraudulent intentionof the appellants – In order to attract the ingredients of ss.406 and420 IPC, it is imperative on the part of the complainant to primafacie establish that there was an intention on part of the petitionerand/or others to cheat and/or to defraud the complainant right fromthe inception – It has to be prima facie established that due to suchalleged act of cheating, the complainant (Respondent No. 2) hadsuffered a wrongful loss and the same had resulted in wrongfulgain for the accused (appellant) – In absence of these elements, noproceeding is permissible in the eyes of law with regard to thecommission of the offence punishable u/s 420 IPC – The impugnedFIR and proceedings in pursuance of charge sheet against theappellants for the offences under ss.406, 420,120B IPC quashed –Penal Code, 1860 – ss.406, 420,120B.

Allowing the appeal, the court

Conclusion

Allowing the appeal, the court

HELD: 1. “Entrustment” of property under Section 405 ofthe Indian Penal Code, 1860 is pivotal to constitute an offenceunder this. The words used are, ‘in any manner entrusted withproperty’. So, it extends to entrustments of all kinds whether toclerks, servants, business partners or other persons, providedthey are holding a position of ‘trust’. A person who dishonestlymisappropriates property entrusted to them contrary to the termsof an obligation imposed is liable for a criminal breach of trustand is punished under Section 406 of the Penal Code. Section420 IPC is a serious form of cheating that includes inducement(to lead or move someone to happen) in terms of delivery ofproperty as well as valuable securities. This section is alsoapplicable to matters where the destruction of the property iscaused by the way of cheating or inducement. Punishment forcheating is provided under this section which may extend to7yearsand also makes the person liable to fine. [Paras 24, 30][903-E-F; 905-B-D]

2. There can be no doubt that a mere breach of contract isnot in itself a criminal offence and gives rise to the civil liabilityof damages. While breach of contract cannot give rise to criminalprosecution for cheating, fraudulent or dishonest intention is the AB

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Abasis of the offence of cheating. In the case at hand, complaintfiled by the Respondent No. 2 does not disclose dishonest orfraudulent intention of the appellants. [Para 34][907-B-D]

3. Having gone through the complaint/FIR and even thechargesheet, it cannot be said that the averments in the FIR andBthe allegations in the complaint against the appellant constitutean offence under Section 405 & 420 IPC, 1860. Even in a casewhere allegations are made in regard to failure on the part of theaccused to keep his promise, in the absence of a culpable intentionat the time of making promise being absent, no offence underSection 420 IPC can be said to have been made out. In the instantCcase, there is no material to indicate that Appellants had anymalafide intention against the Respondent which is clearlydeductible from the MOU dated 20.08.2009 arrived between theparties. Respondent No. 2 filed a complaint u/s 156(3) Cr.P.C on06.06.2012, wherein his prayer for registration of an FIR wasDrejected vide order dated28.02.2013 by the MM, Tis HazariCourt, immediately after which he filed his complaint on 28.03.2013at P.S Bowbazar, Calcutta. The timeline of filing complaints clearlyindicates the malafide intention of Respondent No. 2 which wasto simply harass the petitioners so as to pressurise them intoshelling out the investment made by Respondent No.2.E[Paras 36, 38][908-A-C, G-H]

Uma Shankar Gopalika v. State of Bihar & Anr. (2005)10 SCC 336; Hridaya Ranjan Prasad Verma & Ors. v.State of Bihar & Anr. (2000) 4 SCC 168 : [2000] 2 SCR859; Prof. R.K. Vijayasarathy & Anr. v. Sudha SeetharamF& Anr. (2019) 16 SCC 739 : [2019] 2 SCR 185; VesaHoldings Pvt. Ltd. & Anr. v. State of Kerala & Ors. (2015)8 SCC 293 : [2015] 4 SCR 27 – relied on.

V.Y. Jose & Anr. v. State of Gujarat & Anr. (2009) 3SCC 78 : [2008] 17 SCR 588 Murari Lal Gupta v. GopiGSingh (2005) 13 SCC 699; K. Jayaram and Ors. v.Bangalore Development Authority & Ors. 2021 SCCOnLine SC 1194; Union of India and Ors. v.Shantiranjan Sarkar (2009) 3 SCC 90 : [2009]1 SCR 242; K. Jagadish v. Udaya Kumar G.S. & Anr.

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(2020) 14 SCC 552; V. Ravi Kumar v. State and Ors.A(2019) 14 SCC 568 : [2018] 14 SCR 828; Indian OilCorporation v. NEPC India Ltd. & Ors. (2006) 6 SCC736 : [2006] 3 Suppl. SCR 704; A.V. Mohan Rao &Anr. v. M Kishan Rao & Anr. (2002) 6 SCC 174 : [2002]1 Suppl. SCR 175; Union of India & Ors. v. Cipla Ltd.B& Anr. (2017) 5 SCC 262 : [2016] 7 SCR 523; KrishnaLal Chawla & Ors. v. State of U.P. & Anr.(2021) 5 SCC435; T.T. Antony v. State of Kerala & Ors. (2001) 6 SCC181 : [2001] 3 SCR 942; K. Jayaram and Ors. v.Bangalore Development Authority & Ors. 2021 SCCOnLine SC 1194; State of Haryana & Ors. v. BhajanCLal & Ors. 1992 Supp (1) SCC 335 : [1990] 3 Suppl.SCR 259; R.P. Kapur v. State of Punjab [1960] 3 SCR388; Inder Mohan Goswami & Anr. v. State ofUttaranchal & Ors. (2007) 12 SCC 1 : [2007]10 SCR 847; Indian Oil Corpn. v NEPC India Ltd. &DOrs. (2006) 6 SCC 736 : [2006] 3 Suppl. SCR 704;State of Madhya Pradesh v. Awadh Kishore Gupta &Ors. (2004) 1 SCC 691 : [2003] 5 Suppl. SCR 672; G.Sagar Suri & Anr. v. State of UP & Ors. (2000) 2 SCC636 : [2000] 1 SCR 417; R K Dalmia vs DelhiAdministration [1963] 1 SCR 253; Sudhir ShantilalEMehta v. CBI (2009) 8 SCC 1 : [2009] 12 SCR 682 –referred to.

Case Law Reference

[2022] 1 S.C.R.

From the Judgment and Order dated 01.10.2019 of the High CourtEof Calcutta at Kolkata in C.R.R. No.731 of 2017.

Dr. Menaka Guruswamy, Sr. Adv., Arandhati Kajju, Yash S. Vijay,Ms. Shristi Borthakur, Shubham Bhalla, Asheesh Bajpayee, DeepakSamota, Advs. for the Appellants.

Mrs. Anjana Prakash, Sr. Adv., Anuj Prakaash, Ms. Apurva Jain,FPrince Jain, Shreyas Jain, Kumar Mihir, Ms. Prachi Gupta, RanjeetKumar, Advs. for the Respondents.

The Judgment of the Court was delivered by KRISHNA MURARI, J.G1. Leave granted.

2. This appeal is directed a gainst the judgment and order dated01.10.2019 passed by the High Court of Calcutta (hereinafter referredto as “High Court”) in C.R.R No. 731 of 2017 filed by the appellantspraying for quashing of proceedings being G.R. Case No. 1221 of 2013Hpending before the Court of Learned Chief Metropolitan Magistrate, Kolkata and arising out of Bowbazar Police Station Case No. 168 dated28.03.2013 under Sections 420, 406 and 120B of the Indian Penal Code,1860 (hereinafter referred to as “IPC”). By the said judgment, the HighCourt dismissed the prayer for quashing of the proceedings and heldthat continuance of criminal proceedings against the present appellant/accused would not be an abuse of the process of the court.

3. Brief facts necessary for the disposal of this appeal are asunder:

3.1 M/s. Priknit Retails Limited a public limited company havingits registered office at BXXV, 539A, 10, Jalandhar, Bye Pass Road,Ludhiana, Punjab was incorporated in the year 2002 and subsequentlychanged its name to Priknit Apparels in 2007. The company is engagedin the manufacture and trade of apparels through chain of retail storesunder the brand name and style of Priknit. Appellant No. 1 is the ManagingDirector of the Company and Appellant Nos. 2 and 3 are the Directorsof the said Company. The company has been arrayed as proformaRespondent No. 3.

3.2 In January 2008, Respondent No. 2 an authorizedrepresentative of SMC Global Securities Ltd, Delhi desired to make aninvestment on its behalf with the appellants. It was mutually decidedbetween the parties that Respondent No. 2 will invest an amount of Rs.2.5 crore with the company in lieu of which they will be issued 2,50,000equity shares of Priknit Apparel Pvt. Ltd. Subsequently, RespondentNo. 2 filed their share application form along with the cheque of Rs. 2.5crore.

3.3 Subsequently, an allotment letter dated 29.03.2008 was issuedin favour of Respondent No. 2 whereby 2,50,000 shares were issued inlieu of the investment made by him. The proforma respondent no. 3company and Respondent No. 2 arrived at an understanding, regardingthe investment made by Respondent No. 2.

3.4 Having failed to bring the I.P.O as per memorandum ofunderstanding dated 20.08.2009, Respondent No. 2 issued a legal noticedated 06.12.2011 to the Appellants, who duly replied to the legal noticedenying all the allegations contained in the legal notice.

3.5 That on 06.01.2012, Respondent No. 2 filed a police complaintwith PS Rajender Nagar, New Delhi and the concerned officer of PSRajender Nagar apprised Respondent No. 2 that the complaint does not A

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Apertain to their jurisdiction and therefore the same ought to be transferred.On 11.04.2012, Respondent No. 2 filed a complaint with the EconomicOffences Wing (hereinafter referred to as “EOW”) and the saidcomplaint was transferred to PS Darya Ganj, New Delhi.

3.6 That on 06.06.2012, Respondent No. 2 filed a complaint beingBCC No. 306/1/12 under Section 156(3) of Cr.P.C before the Tiz HazariCourt, New Delhi for registration of FIR against the Appellants andtheir company. On 01.09.2012, Respondent No. 2 also filed anotherComplaint No. 190 of 12 before Tis Hazari Court, New Delhi underSection 68 of the Companies Act read with Section 200 of Cr.P.C whichis pending adjudication.C

3.7 That the Metropolitan Magistrate (hereinafter referred to as“MM”), Tis Hazari vide order dated 28.02.2013 observed that the entiredispute raised by Respondent No. 2 was civil in nature and there was nocriminality involved, thereby turning down the prayer of Respondent No.2 for registration of an FIR and posted the case for pre-summoningDevidence with regard to the application under Section 156(3) Cr.P.Cfiled by Respondent No.2. It is pertinent to mention here that the orderof the MM, Tis Hazari Court, New Delhi attained finality as it was notput to further challenge.

3.8 That on 28.03.2013, Respondent No. 2 filed a second complaintEunder Section 406, 409, 420, 468,120B and 34 IPC on the basis of thesame cause of action with the PS Bowbazar at Kolkata, West Bengaland the same was converted into an FIR bearing No. 168 under Section406, 420, 120B IPC. A final closure report dated 04.03.2014 was filedby the concerned Police Station recommending closure of the case sinceFthe entire dispute was found to be civil in nature.

3.9 That Respondent No. 2 filed a protest petition being GR No.1221/2013 with the Chief Metropolitan Magistrate (hereinafter referredto as “CMM”), Kolkata against closure report dated 04.03.2014 andvide order dated 08.03.2016, the CJM allowed the protest petition andGdirected for further investigation.

3.10 In the meantime, the authorized representative of RespondentNo. 2 made a statement before the MM, Tish Hazari, New Delhi forwithdrawing the complaint case.

3.11 Appellant No. 1 received a notice dated 14.11.2016 underHSection 41(a) Cr.P.C for appearance before the Investigation Officer

(hereinafter referred to as “IO”) at PS Bowbazar, Kolkata. In his replyto the said notice, Appellant No. 1 stated that a complaint has alreadybeen filed with the same cause of action before the Tis Hazari Courtand further sought time to produce the documents sought in the notice.Thereafter, Appellant No. 1 sent a letter with all the relevant documentsrequired for investigation thereby extending full co-operation to the IOat PS Bowbazar, Kolkata in connection with Case No. 168. The IO PSBowbazar, Kolkata sent another notice under Section 41(a) Cr.P.C dated23.12.2016 to Appellant No. 1 and 2 to appear before him with the relevantdocuments.

3.12 That vide order dated 14.02.2017, the CMM, Calcutta tookcognizance of the offence under Section 406, 420, 120B IPC in connectionwith Case No. 168 dated 28.03.2013 corresponding to GR Case No.1221 of 2013 i.e., protest petition.

3.13 Being aggrieved, Appellants herein filed a quashing petitionbeing CRR No. 731 of 2017 under Section 482 Cr.P.C seeking quashingof FIR No. 168 dated 28.03.2013 and also impugned the proceedings inGR Case No. 1221 of 2013 by invoking Sections 401 and 482 Cr.P.C.

3.14 That the High Court vide order dated 06.03.2017 issued noticeto the Respondents and stayed further proceeding of criminal case.Respondent No. 2 filed an application for vacation of the stay ordergranted by the High Court but the same was dismissed vide order dated24.03.2017 while observing that Respondent No. 2 had also filed acomplaint at Delhi on the same allegations, thus the proceedings atCalcutta were intended to harass the Appellants.

3.15 However, the High Court vide impugned judgment and orderdated 01.10.2019 dismissed the quashing as well as the revision petitionfiled by the Appellants and observed that in order to exercise the powerunder Section 482 Cr.P.C, the only requirement is to see whethercontinuance of the criminal proceedings would be a total abuse of theprocess of the court and the continuance of the criminal proceedingsagainst the appellants is in no way an abuse of the process of the court.The operative portion of the aforesaid judgment reads as under: - “In the present case, the allegation in the FIR disclosed theoffences alleged. Moreover, the allegations made in the FIRdisclosed that the petitioner induced the complainant topurchase share or invest money by willful misrepresentation.

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It is true that the complaint discloses that there was acommercial transaction between the parties but at the sametime, it cannot be overlooked that the averments made in thecomplaint/FIR prima facie revel the commission of acognizable offence.

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Contentions on behalf of Appellants

4. Ms. Menaka Guruswamy, learned senior advocate appearingCon behalf of the appellants has vehemently submitted that RespondentNo.2 indulged in the practice of forum shopping by filing 2 complaintsi.e., a complaint u/s 156(3) Cr.P.C before the Tis Hazari Court, NewDelhi on 06.06.2012 and a complaint which was eventually registered asFIR No. 168 u/s 406, 420, 120B IPC before PS Bowbazar, Calcutta onD28.03.2013. FIR in connection with PS Bowbazar, Calcutta was lodgedduring the pendency of the complaint case at Tis Hazari Court, NewDelhi and the said fact was cleverly supressed by Respondent No. 2.

4.1 It was further submitted that initially police submitted a closurereport. However, Respondent No. 2 filed an application under SectionE173(8) of Cr.P.C for further investigation which was allowed and afterfurther investigation, charge sheet was filed against the Appellants herein.

4.2 It was vehemently submitted that the complaint filed in PSBowbazar was the exact reproduction of the complaint filed in NewDelhi with the only difference being the place of occurrence. In theFcomplaint lodged at Delhi, the place of occurrence was shown to be theoffice at New Delhi and in subsequent complaint at Calcutta, the placeof occurrence was changed to its office at Calcutta.

4.3 It was further submitted that the allegations contained in theFIR are purely contractual disputes of civil nature but Respondent No. 2has given a criminal colour to it and that breach of contract does notGcome within the purview of cheating as defined in IPC. In addition to it,it was submitted that the transaction in question between the parties asrevealed from the F.I.R was purely a sale transaction or what may becalled as a commercial transaction, therefore the question of cheatingdoes not arise at all.H

4.4 It was further submitted that there are no allegations in thecomplaint filed by the Respondent No. 2 about the Appellants havingfraudulent or dishonest intentions at the time of making the representation.

4.5 It was also further submitted that the High Court failed toappreciate that the two allegations recorded in the complaint against theAppellants being belated allotment of shares to the complainant companyand the Appellant No. 1’s failure to bring out an IPO are clearlycommercial disputes with no element of criminality.

4.6 It was further submitted that the High Court failed to appreciatethat a mere failure to keep a promise does not create any presumptionof a dishonest intention amounting to a criminal breach of trust underSection 409 IPC or cheating under Section 420 IPC.

4.7 Heavy reliance was placed on the decisions of this Court inV.Y.Jose & Anr. Vs. State of Gujarat & Anr.[1], Murari Lal Gupta Vs.Gopi Singh[2]; K. Jayaram and Ors. Vs. Bangalore DevelopmentAuthority & Ors.[3]; Union of India and Ors. Vs. Shantiranjan Sarkar[4].

Contentions on behalf of Respondents

5. Mrs. Anjana Prakash, learned senior advocate appearing onbehalf of the Respondents has vehemently submitted that the allegationscontained in the complaint disclosed all the ingredients of the allegedoffences and moreover, the criminal proceedings have not been initiatedwith mala fide intention and that the complaint case filed before themagistrate of Tis Hazari Court was not decided on merit and as such thecomplainant cannot be barred from making a fresh complaint.

5.1 It was further submitted that the complaint at Kolkata hadbeen filed only after the prayer u/s 156(3) Cr.P.C was rejected by theDelhi Court on 28.02.2013 in order to avail legal remedies available andwhen the Calcutta Court on 08.03.2016 allowed further investigation,the Respondent in order to avoid multiplicity of proceedings, withdrewthe complaint in Delhi on 09.09.2016.

5.2 It was further submitted that it is an established proposition oflaw that two complaints can co-exist simultaneously if the scope of two 1 (2009) 3 SCC 78

2 (2005) 13 SCC 699

3 2021 SCC OnLine SC 1194

4 (2009) 3 SCC 90

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Acomplaints are different. Reliance in support of the contention was placedon the judgment of this Court in K. Jagadish Vs. Udaya Kumar G.S. &Anr.[5], wherein it was reiterated that two remedies ie. civil and criminalare not mutually exclusive but can co-exist since they essentially differin their context and consequence.

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B5.3 It was also submitted that the established principle of quashingis that at the stage of cognizance all that a Court is required to see ifprima facie an offence is made out and courts should restrain itself fromthrottling legitimate prosecutions at the threshold and the law should beallowed to take its course. Substantiating the same, it was submitted thatthe complainant has made a specific allegation that on inducement ofCthe accused persons, he had parted with 2.50 crore on a false promisethat they would be allotted shares in the company. On 29.02.2008, afalse statement was made by the accused persons that the complainanthad been allotted the shares, whereas it transpired that the resolutionabout the allotment of shares was taken only on 23.03.2009 that is oneDyear later.

5.4 Strong reliance was placed on the decisions of this Court in V.Ravi Kumar Vs. State and Ors.[6]; Indian Oil Corporation Vs. NEPCIndia Ltd. & Ors.[7]; A.V. Mohan Rao & Anr. Vs. M Kishan Rao &Anr.[8]; K. Jagadish (Supra).

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6. We have carefully considered the submissions made at the Barand perused the materials placed on record.

7. Predominantly, the Indian Judiciary has time and again reiteratedthat forum shopping take several hues and shades but the concept ofF‘forum shopping’ has not been rendered an exclusive definition in anyIndian statute. Forum shopping as per Merriam Webster dictionary is:- “The practice of choosing the court in which to bringan action from among those courts that could properlyexercise jurisdiction based on determination of whichcourt is likely to provide the most favourable outcome”

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5 (2020) 14 SCC 552

6 (2019) 14 SCC 5687 (2006) 6 SCC 7368 (2002) 6 SCC 174H

8. The Indian judiciary’s observation and obiter dicta has aided instreamlining the concept of forum shopping in the Indian legal system.This Court has condemned the practice of forum shopping by litigantsand termed it as an abuse of law and also deciphered different categoriesof forum shopping.

9. A two-Judge bench of this Court in Union of India & Ors. Vs.Cipla Ltd. & Anr.[9] has laid down factors which lead to the practice offorum shopping or choice of forum by the litigants which are as follows:- “148. A classic example of forum shopping is when litigantapproaches one Court for relief but does not get the desiredrelief and then approaches another Court for the same relief.This occurred in Rajiv Bhatia Vs. Govt. of NCT of Delhi andOthers[10]. The respondent-mother of a young child had filed apetition for a writ of habeas corpus in the Rajasthan HighCourt and apparently did not get the required relief from thatCourt. She then filed a petition in the Delhi High Court alsofor a writ of habeas corpus and obtained the necessary relief.Notwithstanding this, this Court did not interfere with the orderpassed by the Delhi High Court for the reason that this Courtascertained the views of the child and found that she did notwant to even talk to her adoptive parents and therefore thecustody of the child granted by the Delhi High Court to therespondent-mother was not interfered with. The decision ofthis Court is on its own facts, even though it is a classic caseof forum shopping.

149. In Arathi Bandi v. Bandi Jagadrakshaka Rao & Ors.[11]this Court noted that jurisdiction in a Court is not attractedby the operation or creation of fortuitous circumstances. Inthat case, circumstances were created by one of the parties tothe dispute to confer jurisdiction on a particular High Court.This was frowned upon by this Court by observing that toallow the assumption of jurisdiction in created circumstanceswould only result in encouraging forum shopping.

9 (2017) 5 SCC 262

10 (1999) 8 SCC 525

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A150. Another case of creating circumstances for the purposesof forum shopping was World Tanker Carrier Corporation v.SNP Shipping Services Pvt. Ltd. and others[12] wherein it wasobserved that the respondent/plaintiff had made a deliberateattempt to bring the cause of action namely a collision betweentwo vessels on the high seas within the jurisdiction of theBBombay High Court. Bringing one of the vessels to Bombayin order to confer jurisdiction on the Bombay High Courthad the character of forum shopping rather than anythingelse.

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151. Another form of forum shopping is taking advantage ofCa view held by a particular High Court in contrast to adifferent view held by another High Court. In AmbicaIndustries v. Commissioner of Central Excise (2007) 6 SCC769 the assesse was from Lucknow. It challenged an orderpassed by the Customs, Excise and Service Tax AppellateDTribunal (the CESTAT) located in Delhi before the Delhi HighCourt. The CESTAT had jurisdiction over the States of UttarPradesh, NCT of Delhi and Maharashtra. The Delhi HighCourt did not entertain the proceedings initiated by theassessee for want of territorial jurisdiction. Dismissing theassessee’s appeal this Court gave the example of an assesseeEaffected by an assessment order in Bombay invoking thejurisdiction of the Delhi High Court to take advantage of thelaw laid down by the Delhi High Court or an assessee affectedby an order of assessment made at Bombay invoking thejurisdiction of the Allahabad High Court to take advantageFof the law laid down by it and consequently evade the lawlaid down by the Bombay High Court. It was said that thiscould not be allowed and circumstances such as this wouldlead to some sort of judicial anarchy.

155. The decisions referred to clearly lay down the principleGthat the court is required to adopt a functional test vis-à-visthe litigation and the litigant. What has to be seen is whetherthere is any functional similarity in the proceedings betweenone court and another or whether there is some sort ofsubterfuge on the part of a litigant. It is this functional test H12 (1998) 5 SCC 310

that will determine whether a litigant is indulging in forumshopping or not.”

10. Forum shopping has been termed as disreputable practice bythe courts and has no sanction and paramountcy in law. In spite of thisCourt condemning the practice of forum shopping, Respondent No. 2filed two complaints i.e., a complaint u/s 156(3) Cr.P.C before the TisHazari Court, New Delhi on 06.06.2012 and a complaint which waseventually registered as FIR No. 168 u/s 406, 420, 120B IPC before PSBowbazar, Calcutta on 28.03.2013. ie., one in Delhi and one complaintin Kolkata. The Complaint filed in Kolkata was a reproduction of thecomplaint filed in Delhi except with the change of place occurrence inorder to create a jurisdiction.

11. A two-Judge bench of this Court in Krishna Lal Chawla &Ors. Vs. State of U.P. & Anr.[13] observed that multiple complaints by thesame party against the same accused in respect of the same incident isimpermissible. It held that Permitting multiple complaints by the sameparty in respect of the same incident, whether it involves a cognizable orprivate complaint offence, will lead to the accused being entangled innumerous criminal proceedings. As such he would be forced to keepsurrendering his liberty and precious time before the police and the courts,as and when required in each case.

12. The legality of the second FIR was extensively discussed bythis Court in T.T. Antony Vs. State of Kerala & Ors.[14]. It was held thatthere can be no second FIR where the information concerns the samecognisable offence alleged in the first FIR or the same occurrence orincident which gives rise to one or more cognizable offences. It wasfurther held that once an FIR postulated by the provisions of Section 154of Cr.P.C has been recorded, any information received after thecommencement of investigation cannot form the basis of a second FIRas doing so would fail to comport with the scheme of the Cr.P.C. TheCourt further held that barring situations in which a counter-case is filed,a fresh investigation or a second FIR on the basis of the same orconnected cognizable offence would constitute an “abuse of the statutorypower of investigation” and may be a fit case for the exercise of powereither under Section 482 of Cr.P.C or Articles 226/227 of the Constitutionof India 13 (2021) 5 SCC 43514 (2001) 6 SCC 181

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A13. A two-Judge bench of this Court in K. Jayaram and Ors.Vs. Bangalore Development Authority & Ors.[15]observed:

“16. It is necessary for us to state here that in order to checkmultiplicity of proceedings pertaining to the same subject-matter and more importantly to stop the menace of solicitingBinconsistent orders through different judicial forums bysuppressing material facts either by remaining silent or bymaking misleading statements in the pleadings in order toescape the liability of making a false statement, we are of theview that the parties have to disclose the details of all legalproceedings and litigations either past or present concerningCany part of the subject-matter of dispute which is within theirknowledge. In case, according to the parties to the dispute,no legal proceedings or court litigations was or is pending,they have to mandatorily state so in their pleadings in orderto resolve the dispute between the parties in accordance withlaw.”D

14. The genesis of the present appeal originates from the impugnedorder pronounced by the High Court whereby the High Court dismissedthe application filed under Section 482 as well as 401 Cr.P.C. Takingthat into concern, it is necessary to advert to the principles settled byjudicial pronouncements laying down the circumstances under whichEHigh Court can exercise its inherent powers under Section 482 Cr.P.C.

15. This Court in the widely celebrated judgment of State ofHaryana & Ors. Vs. Bhajan Lal & Ors.[16] considered in detail thescope of the High Court powers under Section 482 Cr.P.C. and/or Article226 of the Constitution of India to quash the FIR and referred to severalFjudicial precedents and held that the High Court should not embark uponan inquiry into the merits and demerits of the allegations and quash theproceedings without allowing the investigating agency to complete itstask. At the same time, this Court identified the following cases in whichFIR/complaint can be quashed:

G“102. (1) Where the allegations made in the first informationreport or the complaint, even if they are taken at their facevalue and accepted in their entirety do not prima facieconstitute any offence or make out a case against the accused.

15 2021 SCC OnLine SC 1194H16 1992 Supp (1) SCC 335

(2) Where the allegations in the first information report andother materials, if any, accompanying the FIR do not disclosea cognizable offence, justifying an investigation by policeofficers under Section 156(1) of the Code except under anorder of a Magistrate within the purview of Section 155(2) ofthe Code.

(3) Where the uncontroverted allegations made in the FIR orcomplaint and the evidence collected in support of the samedo not disclose the commission of any offence and make outa case against the accused.

(4) Where the allegations in the FIR do not constitute acognizable offence but constitute only a non-cognizableoffence, no investigation is permitted by a police officer withoutan order of a Magistrate as contemplated under Section155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are soabsurd and inherently improbable on the basis of which noprudent person can ever reach a just conclusion that there issufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any ofthe provisions of the Code or the Act concerned (under whicha criminal proceeding is instituted) to the institution andcontinuance of the 21 proceedings and/or where there is aspecific provision in the Code or the Act concerned, providingefficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended withmala fide and/or where the proceeding is maliciously institutedwith an ulterior motive for wreaking vengeance on the accusedand with a view to spite him due to private and personalgrudge.”

16. This Court in R.P. Kapur Vs. State of Punjab[17 ]summarizedcategories of cases where inherent power can and should be exercisedto quash the proceedings:-

(i) Where it manifestly appears that there is a legal bar againstthe institution or continuance e.g. want of sanction; A

B

C

DE

F

G

A(ii)Where the allegations in the first information report orcomplaint taken at its face value and accepted in theirentirety do not constitute the offence alleged;

(iii) Where the allegations constitute an offence, but there is nolegal evidence adduced or the evidence adduced clearly orBmanifestly fails to prove the charge.17. This Court in Inder Mohan Goswami & Anr. Vs. State ofUttaranchal & Ors.[18] observed:- “27. The powers possessed by the High Court under Section482 of the Code are very wide and the very plenitude of theCpower requires great caution in its exercise. The court mustbe careful to see that its decision in exercise of this power isbased on sound principles. The inherent power should not beexercised to stifle a legitimate prosecution. The High Courtshould normally refrain from giving a prima facie decision inDa case where all the facts are incomplete and hazy; more so,when the evidence has not been collected and produced beforethe court and the issues involved, whether factual or legal,are of such magnitude that they cannot be seen in their trueperspective without sufficient material. Of course, no hardand fast rule can be laid down in regard to cases in which theEHigh Court will exercise its extraordinary jurisdiction ofquashing the proceedings at any stage”

18. In Indian Oil Corpn. v NEPC India Ltd. & Ors.[19], a two-judge Bench of this Court reviewed the precedents on the exercise ofjurisdiction under Section 482 of the Code of Criminal Procedure 1973Fand formulated guiding principles in the following terms:

“12. … (i) A complaint can be quashed where the allegationsmade in the complaint, even if they are taken at their facevalue and accepted in their entirety, do not prima facieconstitute any offence or make out the case alleged againstGthe accused. For this purpose, the complaint has to beexamined as a whole, but without examining the merits of theallegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliabilityor genuineness of the allegations in the complaint, iswarranted while examining prayer for quashing of acomplaint.

(ii) A complaint may also be quashed where it is a clear abuseof the process of the court, as when the criminal proceedingis found to have been initiated with mala fides/malice forwreaking vengeance or to cause harm, or where theallegations are absurd and inherently improbable.

Analysis

(iii) The power to quash shall not, however, be used to stifleor scuttle a legitimate prosecution. The power should be usedsparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce thelegal ingredients of the offence alleged. If the necessaryfactual foundation is laid in the complaint, merely on theground that a few ingredients have not been stated in detail,the proceedings should not be quashed. Quashing of thecomplaint is warranted only where the complaint is so bereftof even the basic facts which are absolutely necessary formaking out the offence.

(v) ..”

19. A two-Judge Bench of this Court in State of Madhya PradeshVs. Awadh Kishore Gupta & Ors.[20] made the following observation :- “11. The powers possessed by the High Court under Section482 of the Code are very wide and the very plenitude of thepower requires great caution in its exercise. Court must becareful to see that its decision in exercise of this power isbased on sound principles. The inherent power should not beexercised to stifle a legitimate prosecution. High Court beingthe highest Court of a State should normally refrain fromgiving a prima facie decision in a case where the entire factsare incomplete and hazy, more so when the evidence has notbeen collected and produced before the Court and the issuesinvolved, whether factual or legal, are of magnitude andcannot be seen in their true perspective without sufficient A

B

CD

E

F

G

H

Amaterial. Of course, no hard and fast rule can be laid downin regard to cases in which the High Court will exercise itsextraordinary jurisdiction of quashing the proceeding at anystage.

In proceeding instituted on complaint, exercise of the inherentBpowers to quash the proceedings is called for only in a casewhere the complaint does not disclose any offence or isfrivolous, vexatious or oppressive. If the allegations set outin the complaint do not constitute the offence of whichcognizance has been taken by the Magistrate, it is open tothe High Court to quash the same in exercise of the inherentCpowers under Section 482 of the Code.”

20. This Court in G. Sagar Suri & Anr. Vs. State of UP & Ors.[21]observed that it is the duty and obligation of the criminal court to exercisea great deal of caution in issuing the process, particularly when mattersare essentially of civil nature.D

21. This Court has time and again cautioned about convertingpurely civil disputes into criminal cases. This Court in Indian OilCorporation (Supra) noticed the prevalent impression that civil lawremedies are time consuming and do not adequately protect the interestsof lenders/creditors. The Court further observed that:-E

“13. …any effort to settle civil disputes and claims, which donot involve any criminal offence, by applying pressure throughcriminal prosecution should be deprecated and discouraged.”

22. At the outset, Respondent No. 2/Complainant alleged that theFAppellants were responsible for the offence punishable under Section420, 405, 406, 120B IPC. Therefore, it is also imperative to examine theingredients of the said offences and whether the allegations made in thecomplaint, read on their face, attract those offences under the PenalCode.

23. Section 405 of IPC defines Criminal Breach of Trust whichGreads as under: - “405. Criminal breach of trust.—Whoever, being in anymanner entrusted with property, or with any dominion over H21 (2000) 2 SCC 636

property, dishonestly misappropriates or converts to his ownuse that property, or dishonestly uses or disposes of thatproperty in violation of any direction of law prescribing themode in which such trust is to be discharged, or of any legalcontract, express or implied, which he has made touching thedischarge of such trust, or wilfully suffers any other personso to do, commits “criminal breach of trust”.

The essential ingredients of the offense of criminal breach oftrust are:-

(1) The accused must be entrusted with the property orwith dominion over it,

(2) The person so entrusted must use that property, or;

(3) The accused must dishonestly use or dispose of thatproperty or wilfully suffer any other person to do soin violation, (a)of any direction of law prescribing the modein which such trust is to be discharged, or; (b)of any legal contract made touching thedischarge of such trust.

24. “Entrustment” of property under Section 405 of the IndianPenal Code, 1860 is pivotal to constitute an offence under this. Thewords used are, ‘in any manner entrusted with property’. So, it extendsto entrustments of all kinds whether to clerks, servants, business partnersor other persons, provided they are holding a position of ‘trust’. A personwho dishonestly misappropriates property entrusted to them contrary tothe terms of an obligation imposed is liable for a criminal breach of trustand is punished under Section 406 of the Penal Code.

25. The definition in the section does not restrict the property tomovables or immoveable alone. This Court in R K Dalmia vs DelhiAdministration[22]held that the word ‘property’ is used in the Code in amuch wider sense than the expression ‘moveable property’. There is nogood reason to restrict the meaning of the word ‘property’ to moveableproperty only when it is used without any qualification in Section 405.

A

B

C

D

EF

G

H

A26. In Sudhir Shantilal Mehta Vs. CBI[23]it was observed thatthe act of criminal breach of trust would, Interalia mean using or disposingof the property by a person who is entrusted with or has otherwisedominion there over. Such an act must not only be done dishonestly butalso in violation of any direction of law or any contract express or impliedrelating to carrying out the trust.B

27. Section 415 of IPC define cheating which reads as under: - “415. Cheating. —Whoever, by deceiving any person,fraudulently or dishonestly induces the person so deceivedto deliver any proper-ty to any person, or to consent that anyCperson shall retain any property, or intentionally induces theperson so deceived to do or omit to do anything which hewould not do or omit if he were not so deceived, and whichact or omission causes or is likely to cause damage or harmto that person in body, mind, reputation or property, is said to“cheat”.”

D

The essential ingredients of the offense of cheating are:

1. Deception of any person

2. (a) Fraudulently or dishonestly inducing that person- E

(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 doanything which he would not do or omit if he were no sodeceived, and which act or omission causes or is likely tocause damage or harm to that person in body, mind,reputation or property.

F

28. A fraudulent or dishonest inducement is an essential ingredientGof the offence. A person who dishonestly induces another person todeliver any property is liable for the offence of cheating.

29. Section 420 IPC defines cheating and dishonestly inducingdelivery of property which reads as under: - H23 (2009) 8 SCC 1

“420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly induces the personde-ceived to deliver any property to any person, or to make,alter or destroy the whole or any part of a valuable security,or anything which is signed or sealed, and which is capableof being converted into a valuable security, shall be punishedwith imprisonment of either description for a term which mayextend to seven years, and shall also be liable to fine.”

A

B

30. Section 420 IPC is a serious form of cheating that includesinducement (to lead or move someone to happen) in terms of delivery ofproperty as well as valuable securities. This section is also applicable tomatters where the destruction of the property is caused by the way ofcheating or inducement. Punishment for cheating is provided under thissection which may extend to 7 years and also makes the person liable tofine.

C

31. To establish the offence of Cheating in inducing the deliveryof property, the following ingredients need to be proved:- D

1. The representation made by the person was false

2. The accused had prior knowledge that the representationhe made was false.

3. The accused made false representation with dishonestEintention in order to deceive the person to whom it wasmade.

4. The act where the accused induced the person to deliverthe property or to perform or to abstain from any act whichthe person would have not done or had otherwise committed.

F

32. As observed and held by this Court in the case of Prof. R.K.Vijayasarathy & Anr. Vs. Sudha Seetharam & Anr.[24], the ingredientsto constitute an offence under Section 420 are as follows:-

i)a person must commit the offence of cheating under SectionG415; and

ii)the person cheated must be dishonestly induced to; a) deliver property to any person; or

b)make, alter or destroy valuable security or anythingsigned or sealed and capable of being converted intovaluable security. Thus, cheating is an essentialingredient for an act to constitute an offence underSection 420 IPC.

A

B33. The following observation made by this Court in the case ofUma Shankar Gopalika Vs. State of Bihar & Anr.[25]with almost similarfacts and circumstances may be relevant to note at this stage:- “6. Now the question to be examined by us is as to whetheron the facts disclosed in the petition of the complaint anyCcriminal offence whatsoever is made out much less offencesunder Section 420/120-B IPC. The only allegation in thecomplaint petitioner against the accused person is that theyassured the complainant that when they receive the insuranceclaim amounting to Rs. 4,20,000, they would pay a sum of Rs.2,60,000 to the complainant out of that but the same has neverDbeen paid. It was pointed out that on behalf of the complainantthat the accused fraudulently persuaded the complainant toagree so that the accused persons may take steps for movingthe consumer forum in relation to the claim of Rs. 4,20,0000.It is well settled that every breach of contract would not giveErise to an offence of cheating and only in those cases ofbreach of contract would amount to cheating where there wasany deception played at the very inception. If the intention tocheat has developed later on, the same cannot amount tocheating. In the present case, it has nowhere been stated thatat the very inception that there was intention on behalf of theFaccused person to cheat which is a condition precedent foran offence under 420 IPC.

“7. In our view petition of complaint does not disclose anycriminal offence at all much less any offence either underSection 420 or Section 120-B IPC and the present case is aGcase of purely civil dispute between the parties for whichremedy lies before a civil court by filing a properly constitutedsuit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of theprocess of court and to prevent the same it was just andexpedient for the High Court to quash the same by exercisingthe powers under Section 482 Cr.P.C which it has erroneouslyrefused.”

34. There can be no doubt that a mere breach of contract is not initself 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.[26], the distinction between mere breachof contract and cheating, which is criminal offence, is a fine one. Whilebreach of contract cannot give rise to criminal prosecution for cheating,fraudulent or dishonest intention is the basis of the offence of cheating.In the case at hand, complaint filed by the Respondent No. 2 does notdisclose dishonest or fraudulent intention of the appellants.

35. In Vesa Holdings Pvt. Ltd. & Anr. Vs. State of Kerala &Ors.[27], this Court made the following observation:- “13. It is true that a given set of facts may make out a civilwrong as also a criminal offence and only because a civilremedy may be available to the complainant that itself cannotbe ground to quash a criminal proceeding. The real test iswhether the allegations in the complaint disclose the criminaloffence of cheating or not. In the present case, there is nothingto show that at the very inception there was any inception onbehalf of an accused person to cheat which is a conditionprecedent for an offence u/s 420 IPC. In our view, thecomplaint does not disclose any criminal offence at all.Criminal proceedings should not be encouraged when it isfound to be mala fide or otherwise an abuse of the process ofthe courts. Superior courts while exercising this power shouldalso strive to serve the ends of justice. In our opinion, in viewof these facts allowing the police investigation to continuewould amount to anabuse of the process of the court and theHigh Court committed an error in refusing to exercise thepower under Section 482 Cr.P.C to quash the proceedings.”

27 (2015) 8 SCC 293

A

B

C

D

E

F

G

A36. Having gone through the complaint/FIR and even thechargesheet, it cannot be said that the averments in the FIR and theallegations in the complaint against the appellant constitute an offenceunder Section 405 & 420 IPC, 1860. Even in a case where allegations aremade in regard to failure on the part of the accused to keep his promise, inthe absence of a culpable intention at the time of making promise beingBabsent, no offence under Section 420 IPC can be said to have been madeout. In the instant case, there is no material to indicate that Appellants hadany malafide intention against the Respondent which is clearly deductiblefrom the MOU dated 20.08.2009 arrived between the parties.

37. The entire origin of the dispute emanates from an investmentCmade by Respondent No. 2, amounting to Rs. 2.5 crores in lieu of which2,50,000/- equity shares were issued in the year 25.03.2008, finallyculminating into the MOU dated 20.08.2009. That based on this MOUrespondent No. 2 filed three complaints, two at Delhi and one at Kolkata.Thus, two simultaneous proceedings, arising from the same cause ofDaction i.e. MOU dated 20.08.2009 were initiated by Respondent No. 2amounting to an abuse of the process of the law which is barred. Thedetails of the complaints are as under:-

1. On 06.06.2012, Respondent No. 2 filed a private complaintu/s 156(3) Cr.P.C with CJM, Tis Hazari Court Delhi forEregistration of fir against the Appellants; which waswithdrawn on 19.09.2016.

2. Complaint u/s 68 of the companies act r/w section 200 crpcfiled before the CMM, Tis Hazari Courts at Delhi; which ispending.

F

3. On 28.03.2013, a complaint was made to the P.S Bowbazar,Central Division, Kolkata which was eventually registeredas FIR No. 168 u/s 406, 420, 120B IPC, 1860.

38. Respondent No. 2 filed a complaint u/s 156(3) Cr.P.C on06.06.2012, wherein his prayer for registration of an FIR was rejectedGvide order dated 28.02.2013 by the MM, Tis Hazari Court, immediatelyafter which he filed his complaint on 28.03.2013 at P.S Bowbazar,Calcutta. The timeline of filing complaints clearly indicates the malafideintention of Respondent No. 2 which was to simply harass the petitionersso as to pressurise them into shelling out the investment made byRespondent No. 2.H

Malafide intention of Respondent No. 2 is culled out from followingfacts:-

1. At the time of filing of complaint dated 31.03.2013 at PSBowbazar, Respondent No. 2 did not disclose about thefiling of two complaints at Delhi against the appellants.

2. After filing of closure report by the IO Bowbazar PS dated04.03.2014, Respondent No. 2 filed a protest petition beforethe CMM, Kolkata where the material fact of twocomplaints was completely suppressed.

39. In the complaint no. 306/1/2012 dated 06.06.2012 registeredbefore the MM, Tis Hazari Court, New Delhi, Respondent No. 2/complainant stated that:- “(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. MohitGhai started visiting the office of the complainant companyevery now and then in order to persuade the complainantcompany to invest in their company. It is pertinent to mentionherein that they stated the complainant company that the retailbusiness of the apparels under the PRIKNIT brand through anetwork of exclusive brank outlets was witnessing a growth..”

10. That it is submitted that this court has jurisdiction to tryand entertain the matter as the complainant company issituated within the jurisdiction of this court. Moreover, allthe business activities/transactions are being regulated andcontrolled at Delhi. Furthermore, the complaints filed by thecomplainant company are lying before the concerned policestation, which also falls within the jurisdiction of this Hon’bleCourt.”

This clearly demonstrates that the jurisdiction has been created inDelhi as the Appellants used to visit Respondent No. 2 in order to persuadethem to invest in their company and special emphasis can be laid on thefact that Respondent No. 2 himself accepted/agreed to the fact that allthe transactions took place in Delhi. Therefore, registering a complaintin Kolkata is way of harassing the appellant as a complaint has alreadybeen filed in Delhi with all the necessary facts, apart from the jurisdictionalissue at Kolkata.

A

B

C

D

E

F

G

H

40. The MM, Tis Hazari while dismissing the application underSection 156(3) Cr.P.C categorically observed that:- A

“….In case the complainant had suffered any loss on accountof the same, the necessary civil remedy lied in the form ofdamages, compensation and recovery. In case of breach ofany term or condition of the contract, the necessaryproceedings for injunction or specific performance can beinitiated. But that by itself would not mean that the accusedhad misappropriated the amount of complainant for a year.There is nothing to show any conversion or misappropriationof money as the shares had been allotted subsequently. Theparties have themselves agreed on clauses as to failure tohonor their commitments providing for levy of interest ondelayed payments.

B

C

There is no prima facie element of deception or dishonestinducement or misappropriation or conversion or entrustmentor forgery in this case.

D

There is no requirement of police interference in this case.Even otherwise, the evidence in the present case is well withinthe reach of the complainant itself and it is well aware of theidentity of accused persons and no investigation of technicalEnature is required which could warrant police intervention.The necessary record is withing the possession of thecomplainant itself and the same can always be proved onrecord by examining the witnesses. There is no necessity ofany custodial interrogation at this stage and nothingFidentifiable is to be recovered from anyone.

E

In these circumstances, I do not deem it appropriate to exercisemy discretion and get the FIR registered against the accusedpersons, especially when there is no necessity for policeinterference. The present application under Section 156(3)Cr.P.C is thus dismissed.”

G

41. It is pertinent to mention that Application under Section 156(3)Cr.P.C filed before the MM, Tis Hazari Court, Delhi was dismissed andthere was no further challenge against the same. Instead, RespondentNo. 2 chose to file a complaint with the same cause of action in Bowbazar H

PS, Calcutta and to further clarify, the Complaint filed in Bowbazar PSwas the exact reproduction of the complaint filed before Tis Hazari Court,New Delhi with the only difference or what may be termed as‘Jurisdictional improvement’ being in point (c) of the facts. It is reproducedin bold below:- “(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. MohitGhai started visiting the office and regional office of thecomplainant company every now and then in order to persuadethe complainant company to invest in their company...”

10. That the facts mentioned above clearly disclose thecommission of cognizable offences under Sections of theIndian Penal Code mentioned herein. That the accusedpersons approached the regional office too to persuade thehead office for the aforesaid purposes therefore the cause ofaction also arose the local jurisdiction.”

42. The order of the High Court is seriously flawed due to thefact that in its interim order dated 24.03.2017, it was observed that thecontentions put forth by the Appellant vis-à-vis two complaints beingfiled on the same cause of action at different places but the impugnedorder overlooks the said aspect and there was no finding on that issue.At the same time, in order to attract the ingredients of Section of 406and 420 IPC it is imperative on the part of the complainant to primafacie establish that there was an intention on part of the petitioner and/orothers to cheat and/or to defraud the complainant right from the inception.Furthermore it has to be prima facie established that due to such allegedact of cheating the complainant (Respondent No. 2 herein) had suffereda wrongful loss and the same had resulted in wrongful gain for theaccused(appellant herein). In absence of these elements, no proceedingis permissible in the eyes of law with regard to the commission of theoffence punishable u/s 420 IPC. It is apparent that the complaint waslodged at a very belated stage (as the entire transaction took placefrom January 2008 to August 2009, yet the complaint has beenfiled in March 2013 i.e., after a delay of almost 4 years) with theobjective of causing harassment to the petitioner and is bereft of anytruth whatsoever.

43. In view of the above facts and circumstances, the impugnedorder dated 01.10.2019 passed by the High Court is set aside. The A

BC

DE

F

G

H

Aimpugned FIR No. 168 dated 28.03.2013 and proceedings in the file ofCMM, Kolkata, West Bengal in pursuance of charge sheet dated14.02.2017 against the appellants for the offences under Section 406,420, 120B IPC stands quashed.

44. As a result, appeal stands allowed.

B

Devika Gujral

Appeal allowed.

C

D

E

F

G

H