Under the Indian Penal Code, 1860, can a prosecution for cheating under Section 420 be sustained where some plots and part profits were passed on and the dispute is only over quantification of the share due?
Coram: B.R. Gavai; Sandeep Mehta
No. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, and merely on the allegation of failure to keep up the promise it is not enough to initiate criminal proceedings. Where the accused have passed on some plots as well as part profits and the dispute is regarding the quantification of profits and full satisfaction of the share claimed, there is no allegation showing an intention to defraud right from the inception of the transactions.
Benami Transactions (Prohibition) Act, 1988 — s.2(a) — s.4 — Indian Penal Code, 1860 — s.420 — s.406 — s.294(b) — s.506(ii) — Benami transaction — Quashing of criminal proceedings — Abuse of process of law — Benami Transactions (Prohibition) Act, 1988 — s.4 — Property held benami — civil remedy barred, criminal prosecution impermissible — Held: Section 4 of the Benami Act bars the real owner from suing to enforce any right in property held benami. As a corollary, criminal prosecution on the self-same cause of action is impermissible in law. (¶35, 36) Indian Penal Code, 1860 — s.420 — s.406 — Cheating — fraudulent intention at inception of the transaction — Held further: Cheating is not made out unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Where plots and part profits were passed on and only quantification of the share is disputed, the dispute is purely civil. (¶38, 42) Indian Penal Code, 1860 — s.294(b) — s.506(ii) — Obscene acts — profane language and bald allegation insufficient — Held further: Section 294(b) applies only to an obscene song, ballad or words uttered in or near a public place, not to an allegation of abuse by profane language. A bald allegation of intimidation, unsupported by material, will not sustain Section 506(ii). (¶43, 44) Indian Penal Code, 1860 — s.420 — Civil dispute given colour of criminal prosecution — abuse of process — Held further: A purely civil dispute given the colour of criminal prosecution by misusing the tool of criminal law tantamounts to sheer abuse of the process of law. Impugned order and the proceedings pursuant to the charge sheet quashed; appeal allowed. (¶42, 46)
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