RENJITH ABRAHAM Vs. STATE OF KERALA

JUDGEMENT

(1.) ALL these petitions are filed by the accused in different cases in which the allegations regarding the commission of the crime are the same.

(2.) THE cases were taken on the file of the Additional Chief Judicial Magistrate, Thiruvananthapuram on the basis of final reports filed by the Deputy superintendent of Police, CBCID, Special Squad, Thiruvananthapuram alleging commission of offences under Sections 406, 409, 120B, 109 and 420 read with Section 34 of the Indian Penal Code. All these petitions are for quashing the proceedings in different cases against the petitioners. 3. THE petitioners are stated to be partners of the partnership firm which is alleged to have been formed with the intention of cheating the depositors who have deposited money in the firm. THE allegation is that the money deposited by different persons in the partnership firm was not given back to them. THE petitioners would say that at the time of the alleged receipt of money from different persons they were not partners of the firm and that even when they were partners of the firm they were not in charge of and were not responsible for the conduct of the business carried on by the partnership firm. According to the petitioners , the statements in the final report will not make out the offences alleged to have been committed by the petitioners. It is also stated that the dispute is of a civil nature and no prosecution will lie against the petitioners. 4. What is said in the final report is that the first accused is a partnership firm and the other accused are partners of the firm. THE allegation is that the partnership firm was formed with the intention of cheating the public by receiving deposits from them and appropriating the money received as deposits. THEn there is statement regarding money received from the depositors and that the money was not given back to them. THE crimes against the petitioners have been registered on the basis of complaint given by different depositors and in these petitions the persons on whose complaint crimes were registered have got themselves impleaded as additional third respondent. According to the third respondent, every partner of a firm is jointly and severally liable for all acts of the firm done while he is a partner. In the affidavit filed in support of the petition for getting impleaded the defacto complainant has stated that the partners who say that they had ceased to be the partners of the partnership firm had been given notice as mentioned in Section 63(1) of the Indian Partnership Act. As pointed out by the third respondent, the question whether the petitioners were partners at the relevant period and whether they were in charge of and responsible for the conduct of the business of the partnership firm can be decided only after taking evidence. Now the question to be considered is whether the proceedings in the criminal case have to be quashed for the reason that the allegations in the final report regarding the commission of the offence do not disclose the offences mentioned in those final reports. Another point to be considered is whether the dispute is of a civil nature and because of that, continuance of the criminal proceedings should not be allowed. 5. THE allegation in all the final reports is that the first accused firm in which the other accused are partners accepted huge amount from different persons as deposit. THEre is also statement that the deposits were received on promising that interest would be paid for the amount deposited and that the amount would be paid back on demand within two weeks of notice. THE argument advanced by the learned counsel appearing for the petitioner is that the allegation is that even before forming the partnership firm the dishonest intention of cheating was there. That would indicate that according to the investigating officer, who filed the final report, the partners were having the intention to cheat the public by receiving deposits from them. It cannot be said that at the time when the partnership firm was formed there was intention on the part of those who formed the partnership firm to cheat the additional third respondent in all these cases. At the time of entering into a partnership the persons who formed the partnership would not have been aware of the fact that subsequently the defacto complainants would approach the partnership firm for depositing the amount. THE submission made for and on behalf of the petitioners is that the dishonest intention to deceive the defacto complainants had to be there at the time when amount was received from them. 6. In Hridaya Ranjan Prasad Verma v. State of Bihar ([2000] 4 scc 168) the Supreme Court said that for attracting Section 415 of the Indian Penal Code two separate classes of acts which the person deceived may be induced to do will have to be established and that in the first place it must be show that he was induced fraudulently or dishonestly to deliver any property to any person and secondly the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the above decision it was held by the Supreme Court that 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. 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. Mere failure to keep up the promise subsequently will not be sufficient for saying that there was cheating and the fact that there was failure to keep up the promise will not give rise to the presumption that there was failure or dishonest intention at the time of making promise. Admittedly there was an income tax raid in the office of the first accused, the firm and the officers of the Income Tax Department seized money and other articles kept in the office. According to the learned counsel appearing for the petitioners, even if there was failure on the part of the firm in giving back the money, that was due to the seizing of articles and money by the Income Tax Department and that fact would go to show that there was no dishonest or fraudulent intention at the time of receiving money by the partnership firm. Along with the above fact the statement in the final report that the fraudulent intention to cheat the public was there even before the formation of the partnership firm is pointed out. It is sumitted that the allegation should be that at the time of receiving the money from the depositors the petitioners and the other accused were having the fraudulent intention to deceive the depositors. THE fact that in the final report it is said that after receiving deposits interest was being paid to the depositors for a considerable period of time would also strengthen the submission made by the counsel appearing for the petitioners that the income tax raid was the reason for not paying back the amount. 7. In S.N. Palaniktar v. State of Bihar (AIR 2001 SC 2960) the Supreme court said that in order to constitute an offence of cheating the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed the act of cheating. THE Supreme court went on to say that a mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. THEre is no allegation that the partnership firm or any of the persons approached the depositors and induced them to make deposit in the partnership frim. So, it cannot be said that there was an inducement and at the time of making the inducement there was intention on the part of the petitioner to deceive the defacto complainants. 8. When a petition is filed for quashing the proceedings under section 482 of the Criminal Procedure Code what the Court has to do is to look into the allegations against the accused as a whole without going into the merits of the allegations aganist him. On going through the allegations, if a prima facie case is made out disclosing the ingredients of the offence alleged against the accused, Court will not be justified in quashing the proceedings. On the other hand, if the allegations do not constitute any offence as alleged, the Court will have to quash the proceedings in order to prevent abuse of the process of the court. in Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. ([2000] 3 SCC 269) it was held that when exercising powers under Section 482 of the Criminal Procedure code for quashing proceedings the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint the court has no authority or jurisdiction to go into the matter or examine its correctness. Whatever appears on the face of the complaint has to be taken into consideration without any critical examination of the same. When the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused the court has to quash the proceedings. 9. THE argument advanced by the learned counsel appearing for the third respondent is that the mere fact that the dispute is of a civil nature is no ground for saying that the criminal proceedings should not be allowed to continue. In support of the above submission, the decision in M. Krishnan v. Vijay singh and another ([2001] 8 SCC 645) was cited. In the above case, proceedings were initiated against the accused under sections 193, 209, 406, 463 and 471 read with Section 120B of the Indian Penal code and there was a civil suit filed by the accused disputing the genuineness of the documents. THE Supreme Court held that mere pendency of the civil suit between the parties cannot be a ground for quashing criminal proceedings against the accused. THE Supreme Court said that in a criminal Court the allegations made in the complaint regarding the commission of the offence have to be established independently, notwithstanding the adjudication by a civil Court. Where factual foundations for the offence have been laid down in the complaint, criminal proceedings should not be quashed merely on the premise that one or two ingredients have not been stated with details or that the facts narrated reveal the existence of commercial or money transaction between the parties. On going through the statements in the final report it could be seen that the commission of the offences mentioned in the final report are not prima facie made out. 10. One of the petitioners filed Crl. M.C. 6684/2000 in this court for quashing the proceedings in C.C. 65/1999 on the file of the Additional Chief Judicial Magistrate, Thiruvananthapuram. He was the 11th accused in the above case. THE allegations in the above case are similar to the allegations in these cases. A learned single Judge of this Court, by order dated 17th January, 2001, quashed the charge in the above case against the petitioner. THEre are sufficient grounds for quashing the proceedings in these cases. THEse petitions are allowed on quashing the proceedings in the different cases pending on the file of the Additional Chief Judicial Magistrate, Thiruvananthapuram as against the petitioners.