dishonest intention in Sec. 415 and 420 IPC

Supreme Court: In a criminal appeal against Madras High Court’s decision, whereby the application of the accused 3 under Section 482 of the Code of Criminal Procedure, 1973 (‘CrPC’) to quash the First Information Report (‘FIR’) for offences punishable under Section 420 read with Section 34 of the Penal Code, 1860 (‘IPC’) was rejected, the three Judge Bench of BR Gavai, Rajesh Jindal and Sandeep Mehta, JJ. quashed and set aside the impugned FIR and charge sheet.

The complainant’s case was that he extended financial help of Rs. 1,60,00,000/- to the accused 1 for the business projects at Oragadam and around Kancheepuram District with condition to repay the same within twenty months with 100 percent profit. Accused 1 had executed a simple mortgage deed in favour of the complainant for 100 plots at Sumangali Village, for Rs.1,00,00,000/-. Subsequently, a sum of Rs. 1,50,00,000/- and a further sum of Rs. 50,00,000/- was also paid to accused 1. The complainant directly transferred a sum of Rs.20,00,000/- in favour of the present Accused 3 and also transferred a sum of Rs.1,80,00,000/- to Accused 3 for the purchase of the land situated at Chittoor Village, Sriperumbudur Taluk.

A FIR was registered against all the three accused persons for the offences punishable under Section 420 read with Section 34 of the IPC. Aggrieved by the FIR, the Accused 3 preferred an application under Section 482 of the CrPC, to quash the said FIR. Vide impugned order, the High Court, said that the intention of the present appellant/ accused 3 and other accused persons was only to cheat the complainant. The High Court rejected the application and directed the investigating agency to complete the investigation and file a final report. Hence, the present appeal.

The Court referred to R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739, wherein, the ingredients to constitute the offence under Sections 415 and 420 of the IPC were discussed. The Court reiterated that for attracting the provision of Section 420 of the IPC, the FIR/complaint must show that the ingredients of Section 415 of the IPC are made out.

For attracting the provisions of Section 420 of the IPC, it must be shown that the FIR/complaint discloses:

(i) the deception of any person; (ii) fraudulently or dishonestly inducing that person to deliver any property to any person; and (iii) dishonest intention of the accused at the time of making the inducement.

The Court on perusal of the FIR noted that the allegations as to inducement was only qua Accused 1. On perusal of the charge sheet, the Court noted that the role of the Accused 3 was limited and Accused 1 executed the General Power of Attorney in favour of the complainant in respect of the land which was purchased from the Accused 3. The Court took note of another allegation against Accused 3, that upon instructions of Accused 1, the complainant transferred Rs. 20,00,000/- to Accused 3’s Tamil Nadu Mercantile Bank Account towards sale of the land made by the Accused 3 to Accused 1. The Court said that after the sale deed was executed in favour of Accused 1 by Accused 3, no role is attributed to Accused 3. The Court added that on perusal of the FIR and the charge sheet, there was no transaction of any nature directly between the Accused 3 and the complainant. The version, if accepted at its face value, would reveal that, at the instance of accused No. 1, the complainant transferred the amount of Rs.20,00,000/- into the account of the appellant. On receipt of the said amount, the appellant immediately executed the sale deed in favour of accused 1 who thereafter executed the General Power of Attorney in favour of the complainant.

Hence, the Court held that the FIR or the charge-sheet, even if taken at its face value, did not disclose the ingredients to attract Section 420 of the IPC. The Court said that dishonest inducement is the sine qua non to attract the provisions of Sections 415 and 420 of the IPC, which was lacking in the case of Accused 3.

Thus, the Court allowed the appeal and set aside the impugned decision. The Court quashed and set aside the FIR and the consequential charge-sheet filed against Accused 3.

[A.M. Mohan v. State, 2024 SCC OnLine SC 339, Decided on: 20-03-2024]

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