Supreme Court: Appellant was charged that he along with his son, on or about 21-07-1947 at Farrukhabad, Nabipur and Fatehgarh, cheated complainant’s master by fraudulently making him believe that they would pay the price of the potatoes which he might deliver to them and by this fraud, made him give them 181 bags valued at Rs 4300 and thereby committed an offence punishable under Section 420 of the Penal Code, 1860 (‘IPC’). The 3-Judges Bench of M.C. Mahajan, S.R. Das, and N.H. Bhagwati*, JJ., opined that appellant’s son was responsible for cheating and appellant was sought to be implicated in this affair because he was the father and it appeared to have been thought by the complainant that if pressure was applied to appellant, he would pay the money. The Supreme Court concluded that criminal prosecution launched against appellant was without any foundation and therefore, it allowed the appeal, quashed the conviction and the sentence passed upon appellant by the courts below and acquitted him.
Background
On 18-07-1946 and 19-07-1946, appellant’s son under instructions from appellant’s partner carrying on business in the firm name and style of Mukta Prasad Raghunandan Lal purchased 181 bags of potatoes from Bholanath Madan Lal at Farrukhabad. This purchase was made on the assurance of appellant’s son that he would pay the price before the goods were booked at the railway station. The goods were sent to the railway station on 21-07-1946 and 22-07-1946, and on 23-07-1946, appellant’s son obtained a railway receipt for the same in the name of Mukta Prasad Raghunandan Lal as consignees.
The price was however not paid and on 24-07-1946, appellant and his son expressed their inability to pay the price but endorsed the railway receipt in favour of Bholanath Madan Lal, who in their turn further endorsed the same in favour of Potato Merchants Syndicate, Calcutta for taking delivery. Before the goods could be taken delivery of by Potato Merchants Syndicate, Calcutta, appellant’s son went to Calcutta and approached Calcutta Potato Supply Company (‘the Supply Company’) stating that the railway receipt had been lost on account of postal strike and they should take delivery of the consignment on their own security. The Supply Company thereupon furnished an indemnity bond to the railway company on 28-07-1946 and took delivery of the potatoes on 31-07-1946 and it also obtained an indemnity bond from appellant which was executed at Farrukhabad on 31-07-1946 itself.
When Potato Merchants Syndicate, Calcutta presented the railway receipt to the authorities for taking delivery of the potatoes, they were told that the goods had been taken long before and intimation of the same was given by them to Bholanath Madan Lal who thereupon filed the complaint in the Court of the Judicial Magistrate at Fatehgarh. The Judicial Magistrate, Fatehgarh convicted appellant and his son and sentenced them to one year’s rigorous imprisonment. An appeal was filed before the Sessions Judge, Farrukhabad but the same was dismissed. Thereafter, a revision application was filed before the Allahabad High Court, which was also dismissed. The petition of appellant’s son for special leave under Article 136(1) of the Constitution was dismissed but that of appellant was accepted and special leave to appeal was granted to him by this Court.
Analysis, Law, and Decision
The Supreme Court opined that in order to convict the accused of the offence under Section 420 of the IPC, it would be necessary for prosecution to establish that appellant on or about 21-07-1946 deceived complainant’s master and fraudulently or dishonestly induced him to deliver 181 bags of potatoes to them or intentionally induced him 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 caused or was likely to cause damage or harm to him in property and such deceit and inducement must have taken place on or about 21-07-1946 and not at any subsequent date.
The Supreme Court opined that the evidence led by prosecution did not implicate appellant so far as 21-07-1946 was concerned because at that date the only thing that happened was that the goods were sent by Bholanath Madan Lal to the railway station. The Supreme Court stated that appellant’s son was concerned in the transaction on 21-07-1946 but appellant was nowhere on the scene and the railway receipt was also obtained by appellant’s son and not by appellant himself. The Supreme Court also opined that on 24-07-1946, appellant agreed to endorse in favour of Bholanath Madan Lal, the railway receipt which had been obtained by appellant’s son on the previous day and did in fact endorse the same in their favour and this could not be said to amount to any deceit or inducement on appellant’s part.
The Supreme Court stated that even if there was anything in appellant’s conduct prior to 24-07-1946 which could be said to be deceit or inducement, that was completely wiped out by what happened on 24-07-1946. The Supreme Court opined that it was clear that there was neither at the inception nor on 24-07-1946, any deceit or inducement to which appellant was a party. The Supreme Court also opined that appellant was no longer responsible for the non-payment of the price, Bholanath Madan Lal having got the railway receipt endorsed in their favour and negotiated the same in favour of Potato Merchants Syndicate, Calcutta to take delivery of the goods.
The Supreme Court observed that the Courts considered appellant’s conduct in having executed the indemnity bond on 31-07-1946 to wrongly infer that appellant was a party to the cheating of complainant’s master. The Supreme Court stated that the fact that appellant executed the indemnity bond on 31-07-1946 at Farrukhabad could not necessarily lead to the inference that even on 24-07-1946 when the railway receipt was endorsed in favour of Bholanath Madan Lal, appellant was guilty of deceit or inducement.
The Supreme Court stated that it appeared that Mukta Prasad Raghunandanlal purchased 181 bags of potatoes in ordinary course but were unable to pay the price thereof and endorsed the railway receipt in favour of Bholanath Madan Lal on their demand in that behalf on 24-07-1946 and appellant’s son was responsible for what happened. Appellant’s son rushed to Calcutta before the railway receipt which was endorsed by Bholanath Madan Lal in favour of Potato Merchants Syndicate, Calcutta reached them, and they could take delivery of the goods thereunder. He approached the Supply Company and induced them to furnish the indemnity bond to the railway company and took delivery of the goods before Potato Merchants Syndicate, Calcutta could do so on the strength of the railway receipt which had been endorsed in their favour.
The Supreme Court opined that appellant’s son was responsible for cheating and appellant was sought to be implicated in this affair because he was his father and it appeared to have been thought by the complainant that if pressure was applied to appellant, he would pay the money. This was really an indirect attempt by the complainant to achieve his end of obtaining the price of the potatoes, not through the instrumentality of the civil courts but by adopting what was very often done by parties, the cheap and expeditious method of having recourse to the criminal courts of the land. The Supreme Court concluded that criminal prosecution was launched against appellant without any foundation. Thus, the Supreme Court allowed the appeal, quashed the conviction and the sentence passed upon appellant by the courts below and acquitted him.
[Raghunandan Lal v. State of U.P., (1952) 2 SCC 486, decided on 17-11-1952]
*Judgment authored by: Justice N.H. Bhagwati
Note: Cheating and dishonestly inducing delivery of property u/s 420 of the Penal Code, 1860
Cheating is defined in Section 415 of the Penal Code, 1860 (‘IPC’). Section 420 of the IPC lays down the punishment for aggravated forms of cheating where the offender dishonestly induces a person so deceived to deliver any property or interfere with any valuable security. Section 420 specifically punishes aggravated cases of cheating and any act of cheating, whether fraudulently or dishonestly, is punishable under Section 417 of the IPC. In contrast, Section 420 of the IPC specifically punishes a case where cheating is done by dishonest inducement and its subject matter is property or valuable security. It is essential to prove that the parting of the property is by virtue of dishonest inducement of the accused and the delivered property must be of some monetary value to the person who has been cheated.
Advocates who appeared in this case :
For the Appellant: Nanak Chand, Advocate
For the Respondent: B.S. Shastri, Advocate
Buy Penal Code, 1860 HERE
