F. Edison and Fransisca Edison v. Station House Officer, Kunnamkulam Police Station, Kunnamkulam, Thrissur District

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI THURSDAY, THE 15TH DAY OF FEBRUARY 2018 / 26TH MAGHA, 1939 Bail Appl..No. 26 of 2018 ---------------------- ## APPLICANTS/ACCUSED --------------------------------- 1 F. EDISON AGED 68 YEARS, S/O.FRANCIS, 40/3170A, LISSIE ROAD, KOCHI-682015. 2 FRANSISCA EDISON AGED 62 YEARS, W/O.F.EDISON, 40/3170A, LISSIE ROAD, KOCHI-682015. BY ADVS.SRI.P.U.SHAILAJAN SRI.M.SURESH KUMAR SRI.V.SREEJITH (K/1398/2000) SMT.D.N.NISHANI SMT.VIDYA KURIAKOSE ## RESPONDENT/COMPLAINANT: ----------------------------------------- THE STATION HOUSE OFFICER, KUNNAMKULAM POLICE STATION KUNNAKULAM, THRISSUR DISTRICT, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031. BY SR.PUBLIC PROSECUTOR SRI.K.B.UDAYAKUMAR THIS BAIL APPLICATION HAVING BEEN FINALLY HEARD ON 08-02-2018 THE COURT ON 15-02-2018 PASSED THE FOLLOWING: ## B.A.NO.26 OF 2018 ------------------------ ## APPENDIX - -------------- ## PETITIONERS' ANNEXURES - -------------------------------------- - A. TRUE COPY OF THE LAWYER NOTICE DATED 24.11.2017 ISSUED BY THE DE FACTO COMPLAINANT IN FAVOUR OF THE PETITIONERS. - B. TRUE COPY OF THE REPLY DATED 27.12.2017 TO ANNEXURE-A NOTICE TRUE COPY P.S.TO JUDGE ## **R.NARAYANA PISHARADI, J** ************************* B.A.No.26 of 2018 -----------------------------------------------Dated this the 15[th ] day of February, 2018 ## **O R D E R** The petitioners are the fifth and the sixth accused in the case registered as Crime No.34/2018 of the Kunnamkulam police station under Sections 420 and 406 IPC. They seek the protection envisaged under Section 438 of the Code of Criminal Procedure, 1973 in the event of arrest by the police in the case. 2. The prosecution case can be briefly stated as follows: The petitioners are the partners of the firm by name Desamangalam Rubber Estate. On 15.08.2015, the de facto complainant and his son entered into an agreement with the petitioners for purchasing 94 acres and 19 cents of property belonging to the firm in their favour for a consideration of thirty crores rupees. The defacto complainant paid a total B.A.No.26/2018 2 amount of eight crores and fifteen lakhs rupees to the petitioners as advance towards sale consideration. Inspite of a lawyer notice sent to them, the petitioners and other partners did not register sale deed in respect of the property in the name of the de facto complainant and his son. They also did not repay the amount of advance received by them. Thus, they cheated the de facto complainant and his son. 3. Heard the learned counsel for the petitioners and the learned Public Prosecutor. Perused the case diary. Heard also the learned counsel for the de facto complainant who has filed petition for impleading him in the bail application. 4. The sum and substance of the allegation against the petitioners is that they entered into an agreement with the de facto complainant and his son for sale of the property owned by the firm of which they were partners and they received eight crores and fifteen lakhs rupees as advance towards sale consideration, but they did not not register B.A.No.26/2018 3 sale deed in favour of the de facto complainant and his son in respect of the property and that they also did not repay the amount of advance received by them and thus they committed the offences of criminal misappropriation and cheating. The dispute relating to the transaction alleged in the case is essentially a civil dispute. At the time of hearing, learned counsel for the petitioners submitted that the de facto complainant has instituted a suit in the civil court concerned on the basis of the sale agreement and the property which is the subject matter of agreement has been attached as per the order of the civil court. The correctness of this submission is not disputed by the learned counsel for the de facto complainant. 5. The offence of cheating is defined in Section 415 IPC. It reads thus: "415. -- Cheating:- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so B.A.No.26/2018 4 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 the person in body, mind, reputation or property, is said to "cheat". 6. Illustration (g) to section 415 of the Indian Penal Code which defines the offence of cheating reads as follows : "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 B.A.No.26/2018 5 breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract". ## 7. Section 420 IPC reads as below: “420.-- Cheating and dishonestly inducing delivery of property. Whoever cheats and thereby dishonestly induces the person deceived 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 capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” B.A.No.26/2018 6 8. The primary ingredient of the offence of cheating is deception played by the accused by fraudulently or dishonestly inducing the person so deceived to do or omit to do something or to deliver any property to any person etc. "Fraudulently" is defined in Section 25 of the IPC as the doing of a thing with intent to defraud. "Dishonestly" is defined in Section 24 of the IPC as doing anything with the intention of causing wrongful gain to one person or wrongful loss to another person. A dishonest intention cannot be inferred from the mere fact of a subsequent breach of promise. 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 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 B.A.No.26/2018 7 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 fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed (See Hridaya Ranjan Prasad Verma v. State of Bihar : AIR 2000 SC 2341). 9. Distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal and the accused is guilty of the B.A.No.26/2018 8 offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a Civil Court. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction (See International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) v. Nimra Cerglass (P) Ltd. : (2016) 1 SCC 348). 10. In the instant case, at the time when the agreement for sale was executed, it could have in no event been termed dishonest so as to hold that the de facto complainant was cheated of the amount of advance sale consideration. At any rate, whether the petitioners intended or not to execute sale deed in respect of the property in B.A.No.26/2018 9 favour of the de facto complainant is a matter to be proved at the time of trial from the entire circumstances of the transaction. 11. The question whether breach of contract of an agreement for sale would constitute an offence under Section 406 or Section 420 of the Indian Penal Code arose in _Dalip Kaur v. Jagnar Singh : AIR 2009 SC 3191_ . In that case, the Hon'ble Supreme Court has held as follows: “If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in S.405 of the Indian Penal Code”. 12. In the aforesaid circumstances, prima facie, the B.A.No.26/2018 10 dispute relating to the transaction involved in the case appears to be essentially a civil dispute. Custodial interrogation of the petitioners appears to be not necessary to have an effective investigation in the case. The prosecution has no case that the petitioners have got criminal antecedents. In these circumstances, I am of the view that the discretion of the Court can be exercised in favour of the petitioners to grant them pre-arrest bail. 13. Learned counsel for the de facto complainant would submit that the first petitioner and some other persons entered into the office of the de facto complainant and threatened him and they tried to snatch away the documents relating to the transaction. Learned counsel would submit that if the petitioners are enlarged on bail, they would intimidate the de facto complainant and other witnesses in the case. On granting bail to the petitioners, appropriate conditions can be imposed to avoid such B.A.No.26/2018 11 contingencies. 14. In the result, the application is allowed and it is ordered as follows: 1) The petitioners shall be released on bail on executing a bond for Rs.1,00,000/- (Rupees one lakh) each with two sureties each for the like amount in the event of their arrest by the police in Crime No. 34/2018 of Kunnamkulam Police Station. 2) The petitioners shall appear before the investigating officer between 9 a.m and 11 a.m on all Saturdays for a period of three months from the date of their release on bail. 3) The petitioners shall not influence or intimidate the de facto complainant and other prosecution witnesses. They shall not make any attempt to tamper with the evidence in the case. - 4) The petitioners shall not leave the State of B.A.No.26/2018 12 Kerala without the prior permission of the jurisdictional Court. 5) The petitioners shall appear before the investigating officer as and when directed in writing to do so. (6) The petitioners shall produce their passport in the Magistrate's Court concerned within three days from the date of their release on bail. If they have no passport, they shall file an affidavit to that effect in the Magistrate's Court concerned within that period. (7) If the petitioners violate any of the conditions of bail, the Magistrate's Court concerned is at liberty to cancel the bail in accordance with law. (sd/-) ## **R.NARAYANA PISHARADI, JUDGE** jsr