CRLP/26403/2019 of VIKAS GUPTA AND 4 OTHERS Vs State of U.P. AND 3 OTHERS on 27 December 2019

1. Heard Shri Ram Autar Verma, learned counsel for petitioner and Shri Jai Narayan, learned A.G.A. for respondent nos. 1, 2 and 3.

2. On an application of urgency stating that a first information reporthas been lodged against petitioners on 20.12.2019 and police is going toarrest the petitioners, this writ petition along with the urgencyapplication has been filed. On the request of learned counsel for thepetitioners, we have taken up this matter today.

3. The present writ petition under Article 226 of the Constitution ofIndia has been filed by five petitioners namely, Vikas Gupta; MeenuGupta wife of Vikas Gupta; Shubhangi Gupta wife of Sri AnubhavGupta; Anubhav Gupta son of Onkarnath Gupta and Kaushal Gupta aliasKamlesh Gupta wife of Shri Onkarnath Gupta. Vikas Gupta and MeenuGupta are husband and wife and similarly, Anubhav Gupta andShubhangi Gupta are husband and wife and Kaushal Gupta aliasKamlesh Gupta is mother of Vikas Gupta and Anubhav Gupta andmother-in-law of Meenu Gupta and Shubhangi Gupta.

4. A writ of certiorari has been prayed for quashing of FirstInformation Report (hereinafter referred to as “FIR”), registered as CaseCrime No. 1142 of 2019 dated 20.12.2019, registered at Police Station -Modi Nagar, District - Ghaziabad, under Sections 420, 467, 68, 471,120B of I.P.C.

5. Learned counsel for petitioner contended that allegations ofpreparation of forged document is incorrect. FIR has been lodged againstfive accused i.e. petitioners who are members of the same family andthree of the petitioners, namely, Meenu Gupta, Shubhangi Gupta andKaushal Gupta alias Kamlesh Gupta are not Directors of Company andthey have been falsely implicated. It is further stated that FIR in questionwas registered pursuant to an order passed by the Magistrate onapplication under Section 156(3) Cr.P.C. and in the said application,complainant has also filed copies of alleged sale deeds executed bypetitioners, but those sale deeds are not registered and have no signaturesof Vikas Gupta or anyone else. It is stated that petitioners have beenfalsely implicated and even if allegations contained in FIR are taken tobe true, they do not constitute any offence under Sections 420, 467, 68,471 and 120B IPC.

6. Learned AGA, on the contrary, submitted that bare perusal of theallegations contained in FIR shows that ingredients of sections underwhich FIR has been registered are satisfied and at this stage, no furtherenquiry can be made by this Court and since it is a matter ofinvestigation, therefore, writ petition is misconceived.

7. Record shows that Shri Raghuvinder Singh impleaded asrespondent-4, has filed an application under Section 156(3) Cr.P.C.before Chief Judicial Magistrate, Ghaziabad, which was considered anddisposed of by Additional Chief Judicial Magistrate, Ghaziabad videorder dated 13.12.2019 and it directed police to register FIR and proceedfor investigation accordingly. Consequently, FIR impugned in this writpetition was registered by police on 20.12.2019. Broadly, the allegationscontained in FIR read as under :- ^^egksn;] ;g fd izkFkhZ esllZ eksnhuxj isij feYl izkbZosV fy0 fLFkr estjvk'kkjke R;kxh jksM eksnhuxj] Fkkuk eksnhuxj xkft;kckn ds funs'kd gSaA 2- ;gfd iz'uxr QeZ esa izkFkhZ ds vfrfjDr foI{kh la[;k&1 o 2 Hkh funs'kd gSaA 3- ;g

fd bl QeZ esa izFkhZ iwoZ foi{k la[;k&3 funs'kd Fkh] ftlds }kjk R;kx&i= fn;stkus ij fnukad 28-01-2019 dks izkFkhZ }kjk mDr dEiuh us funs'kd dk in Hkkjxzg.k fd;k x;k FkkA 4- ;g fd bl e/; foi{kh x.k ds eu esa cnfu;rh vk x;hrFkk foi{khx.k }kjk QthZ izi= rS;kj fd;s ftuds vk/kkj ij QeZ ds LokfeRo dh26-00 oxZ xt tehu ftl ij igys ls gh dksVsd egsUnz cSad fy0] 'kk[kk iatkchckx ubZ fnYyh dk djhc 26 djksM :i;s cdk;k gS vkSj vU; foi{kh la[;k&3] 4o 5 ds lkFk feydj fodz; djus dh lkft'k dj jgs gSaA 5- ;g fd foi{khx.k }kjk QthZ rjhds ls QeZ dk ,d fjtksY;w'ku fnukafdr 19-01-2018 cuk;k gqvk gSrFkk blh izdkj ds dksVsd egsUnz cSad fy0 ds QthZ ,u0vks0lh0 fn[kkdj IykVdkV dkV dj fodz; dj jgs gSaA bruk gh ugha bUgha QthZ izi=ksa ds lgkjsfoi{khx.k }kjk foi{kh la[;k&6 dks 1500 oxZ xy o 1300 oxZ xt tehu dk Hkhfodz; dj fn;k gS tcfd bl ckcr izkFkhZ ls u rks dksbZ lger yh gS rFkk udEiuh vf/kfu;e ds izko/kkuksa ds rgr uk gh dh izLrko ikl djk;k gS ftlls ;glkfcr gksrk gS fd foi{kh x.k }kjk izkFkhZ ds Hkh QthZ gLrk{kj fd;s gSaA 6- ;g fdfnukad 06-09-2019 dks tc izkFkhZ us foi{khx.k ls bl lEcU/k esa ckr djus dhdksf'k'k dh rks foi{kh x.k us izkFkhZ ds Åij voS/k vlykrku fn;k o /kedh nh fd;gkWa rks ,slk gh gksrk gSA t;knk cksys rks tku ls gkFk /kks cSBksxsA ftlds cknizkFkhZ pqipki okil vk x;k rFkk mDr lHkh nLrkost foi{khx.k ds dCts esa gSa ;fnfoi{khx.k dks bUgsa iz;ksx djus ls ugha jksdk x;k rks foi{khx.k vHkh vkSj Hkhfodz; dj ldrs gSaA 7- ;g fd izkFkhZ foi{khx.k }kjk fd;s x;s d`R; dh ckcrFkkuk eksnhuxj o Jheku ofj"B iqfyl v/kh{kd ls dbZ ckj feykA fdUrq dksbZdk;Zokgh ugha gqbZA rc foi{khx.k ds fo:) eqdnek ntZ dj o dk;Zokgh dh ckcrfnukad 20-09-19 dks ,d izkFkZuk&i= Jheku ofj"B iqfyl v/kh{kd egksn; dksvk;ksftr fd;k fdUrq muds fo:) dksbZ dk;Zokgh ugha dh x;h gSA vr% Jheku~ thls izkFkZuk gS fd foi{khx.k }kjk fd;s x;s mijksDr tkylkth] QthZ nLrkost rS;kjdjus rFkk mUgsa vly tSlk iz;ksx dj izkFkhZ ds lkFk /kks[kk/kMh djus dh ckorFkkuk eksnhuxj dks foi{kh x.kksa ds fo:) hkk0n0lafgrk dh /kkjk 420] 467] 468]471] 120 ch ds rgr eqdnek ntZ fd;s tkus ds vkns'k ikfjr djus dh d`ikdjsaA**

8. The allegations in FIR consists of preparation of false documentsfor the purpose of showing authority of sale of property of the Company;preparation of forged resolution of the firm with back date of 19.01.2018

and on the basis of aforesaid two documents, transaction of sale ofCompany's property without consent of complainant who is Director ofthe company since 28.01.2019. It is also stated that when complainantsought to settle the matter with the accused, they threatened him withdire consequences and also administered threat of his life, hence, FIRwas lodged.

9. It is not disputed that property which is allegedly sought to be soldby petitioners as per F.I.R. version own and belong to the Company,namely, M/s. Modinagar Paper Mills Ltd. Modinagar, Ghaziabad situateat Major Asharam Tyagi Road Modi Nagar, Ghaziabad. Record of thewrit petition also contains Annexure 3C a copy of agreement for saleexecuted by petitioner-1, Vikas Gupta in his capacity as ManagingDirector of said company, wherein he has referred to Company'sresolution dated 19.01.2018 in order to show his authority for executionof aforesaid agreement to sell. The aforesaid agreement to sell wasexecuted on 04.05.2018 and is a registered document. It clearly mentionsthat Vikas Gupta, Managing Director of the Company, the vendor, isauthorised to sell the property which was subject matter of aforesaidagreement. It is also not disputed by learned counsel for petitioner thatcomplainant became Director of the Company on 28.01.2019. Petitionerhas also placed on record the alleged resolution dated 19.01.2018 onPage 63 of Paper Book which contains signature of three persons,namely, Vikas Gupta., Dr. Anubhav Gupta and Dr. Shubhangi Guptashown as Managing Director, Executive Director and Director,respectively. There is nothing on record to show that Shubhangi Guptaceased to be Director on any subsequent point of time and therefore,document of Page 63 of writ petition belie the contention of learnedcounsel for petitioner that Shubhangi Gupta is not one of the Directors ofCompany. With respect to the others, it is a matter of investigation.

10. The fact remains that treating the facts stated in FIR as true on the face of it, it cannot be said that offences under Sections 420, 467, 68,471, 120B IPC are not made out. Lot of arguments have been advancedwith respect to application of 420, 467, 68, 471, 120B IPC, but we findthat if the allegations are taken to be true, ingredients of aforesaidprovision are made out.

11. Section 420 is "cheating" which is defined in Section 415 and boththese provisions read as under:

"415. Cheating.- Whoever, by deceiving any person, fraudulently ordishonestly induces the person so deceived to deliver any property toany person, or to consent that any person shall retain any property, orintentionally induces the person so deceived to do or omit to doanything which he would not do or omit if he were not so deceived, andwhich act or omission causes or is likely to cause damage or harm tothat person in body, mind, reputation or property, is said to "cheat".

Explanation.--A dishonest concealment of facts is a deception withinthe meaning of this section."

"420. Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceivedto deliver any property to any person, or to make, alter or destroy thewhole or any part of a valuable security, or anything which is signed orsealed, and which is capable of being converted into a valuablesecurity, shall be punished with imprisonment of either description fora term which may extend to seven years, and shall also be liable tofine."

12. In order to attract allegations of "cheating", following things mustexist:

(i) deception of a person;

(ii) (A) fraudulent or dishonest inducement of that person, (a) to deliver any property to any person; or, (b) to consent that any person shall retain any property, (B) intentional inducing that person to do or omit to do anything,

(a) which he would not do or omit if he was not so deceived,and, (b) such act or omission causes or is likely to cause damage orharm to that person in body, mind, reputation or property.

13. Then in order to attract Section 420 I.P.C., essential ingredientsare:

(i) cheating;

(ii) dishonest inducement to deliver property or to make or destroyany valuable security or any thing which is sealed or signed or iscapable of being converted into a valuable security; and,

(iii) mens rea of accused at the time of making inducement andwhich act of omission.

14. In Mahadeo Prasad Vs. State of West Bengal, AIR 1954 SC 724it was observed that to constitute offence of cheating, intention todeceive should be in existence at the time when inducement was offered.

15. In Jaswantrai Manilal Akhaney Vs. State of Bombay, AIR 1956SC 575, Court said that a guilty intention is an essential ingredient of theoffence of cheating. For the offence of cheating, "mens rea" on the partof that person, must be established.

16. In G.V. Rao Vs. L.H.V. Prasad and others, 2000(3) SCC 693,Court said that Section 415 has two parts. While in the first part, theperson must "dishonestly" or "fraudulently" induce the complainant todeliver any property and in the second part the person shouldintentionally induce the complainant to do or omit to do a thing. In otherwords in the first part, inducement must be dishonest or fraudulent whilein the second part, inducement should be intentional.

17. In Hridaya Ranjan Prasad Verma and others Vs. State ofBihar and another, 2000(4) SCC 168 Court said that in the definition of'cheating', there are set forth two separate classes of acts which theperson deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to anyperson. The second class of acts set forth in the section is the doing oromitting to do anything which the person deceived would not do or omitto do if he were not so deceived. In the first class of cases, inducing mustbe fraudulent or dishonest. In the second class of acts, the inducing mustbe intentional but not fraudulent or dishonest. It was pointed out thatthere is a fine distinction between mere breach of contract and theoffence of cheating. It depends upon the intention of accused at the timeto inducement which may be judged by his subsequent conduct but forthis subsequent conduct is not the sole test. Mere breach of contractcannot give rise to criminal prosecution for cheating unless fraudulent ordishonest 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. In order tohold a person guilty of cheating it would be obligatory to show that hehad fraudulent or dishonest intention at the time of making the promise.Mere failure to keep up promise subsequently such a culpable intentionright at the beginning, i.e, when he made the promise cannot bepresumed.

18. In S.W. Palanitkar and others Vs. State of Bihar and another,2002(1) SCC 241, while examining the ingredients of Section 415 IPC,the aforesaid authorities were followed.

19. In Hira Lal Hari lal Bhagwati Vs. CBI, New Delhi, 2003(5)SCC 257, Court said that to hold a person guilty of cheating underSection 415 IPC it is necessary to show that he has fraudulent ordishonest intention at the time of making promise with an intention toretain property. The Court further said:

"Section 415 of the Indian Penal Code which defines cheating, requiresdeception of any person (a) inducing that person to: (i) to deliver anyproperty to any person, or (ii) to consent that any person shall retain any property OR (b) intentionally inducing that person to do or omit todo anything which he would not do or omit if he were not so deceivedand which act or omission causes or is likely to cause damage or harmto that person, anybody's mind, reputation or property. In view of theaforesaid provisions, the appellants state that person may be inducedfraudulently or dishonestly to deliver any property to any person. Thesecond class of acts set forth in the Section is the doing or omitting todo anything which the person deceived would not do or omit to do ifhe were not so deceived. In the first class of cases, the inducing mustbe fraudulent or dishonest. In the second class of acts, the inducingmust be intentional but not fraudulent or dishonest."

(Emphasis added)

20. In Devender Kumar Singla Vs. Baldev Krishan Singh 2004 (2)JT 539 (SC), it was held that making of a false representation is one ofthe ingredients of offence of cheating.

21. In Indian Oil Corporation Vs. NEPC India Ltd., 2006(6) SCC736 in similar circumstances of advancement of loan againsthypothecation, the complainant relied on Illustrations (f) and (g) toSection 415, which read as under:

"(f) A intentionally deceives Z into a belief that A means to repay anymoney that Z may lend to him and thereby dishonestly induces Z to lendhim money, A not intending to repay it. A cheats."

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

22. Court said that crux of the postulate is intention of the person who induces victim of his representation and not the nature of the transactionwhich would become decisive in discerning whether there wascommission of offence or not. Court also referred to its earlier decisionsin Rajesh Bajaj Vs. State NCT of Delhi, 1999(3) SCC 259 and heldthat it is not necessary that a complainant should verbatim reproduce inthe body of his complaint all the ingredients of the offence he is alleging.Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent.

23. In Vir Prakash Sharma Vs. Anil Kumar Agarwal and another,2007(7) SCC 373 it was held that if no act of inducement on the part ofaccused is alleged and no allegation is made in the complaint that therewas any intention to cheat from the very inception, the requirement ofSection 415 read with Section 420 IPC would not be satisfied. The Courtrelied on the earlier decisions in Hridaya Ranjan Prasad Verma(supra) and Indian Oil Corporation Vs. NEPC India Ltd.(supra).

24. The aforesaid authorities have been referred to and relied on inreference to offence under Section 420 I.P.C. by a Division Bench of thisCourt in Sh. Suneel Galgotia and another Vs. State of U.P. and others2016 (92) ACC 40.

25. Section 467 IPC deals with forgery of valuable security, will, etc.and reads as under:-

"467. Whoever forges a document which purports to be a valuablesecurity or a will, or an authority to adopt a son, or whichpurports to give authority to any person to make or transfer anyvaluable security, or to receive the principal, interest or dividendsthereon, or to receive or deliver any money, movable property, orvaluable security, or any document purporting to be anacquittance or receipt acknowledging the payment of money, or anacquittance or receipt for the delivery of any movable property orvaluable security, shall be punished with imprisonment for life, orwith imprisonment of either description for a term which mayextend to ten years, and shall also be liable to fine". security or a will, or an authority to adopt a son, or whichpurports to give authority to any person to make or transfer anyvaluable security, or to receive the principal, interest or dividendsthereon, or to receive or deliver any money, movable property, orvaluable security, or any document purporting to be anacquittance or receipt acknowledging the payment of money, or anacquittance or receipt for the delivery of any movable property orvaluable security, shall be punished with imprisonment for life, orwith imprisonment of either description for a term which mayextend to ten years, and shall also be liable to fine".

26. The essential ingredients of Section 467 IPC as is evident from abare perusal of above provision are:-

(i) accused has committed forgery;

(ii) such forgery was committed in relation to a document which purports to be; (a) valuable security; or (b) a will; or

(c) an authority to adopt a son; or

(d) which purports to give authority to any person to make ortransfer any valuable security; or (e) to receive the principal, interest or dividends thereon; or (f) to receive or deliver any money, movable property, or valuablesecurity, or any document purporting to be an acquittance orreceipt acknowledging the payment of money; or (g) an acquittance or receipt for the delivery of any movableproperty or valuable security.

27. In order to bring an offence under Section 467 IPC, all aboveingredients must be satisfied.

28. Section 471 IPC talks of use of forged document and reads as under:- "471. Whoever fraudulently or dishonestly uses as genuine anydocument or electronic record which he knows or has reason tobelieve to be a forged document or electronic record, shall bepunished in the same manner as if he had forged such documentor electronic record."

29. Looking to entire facts and circumstances of case, we do not findany merit in writ petition justifying quashing of FIR in question andwhether petitioners have actually committed offence or not or any ofthem is involved in the matter or not, is a matter of investigation, whichis not to be taken note of by this Court at this stage.

30. We make it clear that observations made by this Court are only forthe purpose of considering this writ petition on merits as to whether FIRin question should be deserve to be quashed or not and shall notprejudice the investigation or proceedings before the Magistrate, who shall proceed in the matter independently.

31. The writ petition is dismissed accordingly.

Order Date : 27.12.2019

I. Batabyal/AK