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Misleading Representation and Inducing Property Constitutes Cheating: Himachal Pradesh High Court

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On 2nd November 2020, a Single Judge Bench of Hon’ble Justice Vivek Singh Thakur heard the case of Kehar Singh Kachi & Another v. State of Himachal Pradesh & another via video conferencing.
The petition was preferred against the order passed by learned Additional Chief Judicial Magistrate, Shimla, H.P., in the case of State v. Kehar Singh Khachi, whereby learned Magistrate had taken cognizance under Section 173 of the CrPC (Report of the police officer on completion of an investigation) for the alleged commission of an offence punishable under Section 420 (Cheating and dishonestly inducing delivery of property) read with Section 34 (Acts done by several persons in furtherance of common intention) of the IPC.

Facts of the case

The petitioners had shown a big vacant plot situated in Shimla to the respondent available for sale, and the petitioner also disclosed to the respondent that different persons owned the said land, and he was holding Power of Attorney. The respondent and her husband were interested in purchasing a plot for construction of their residence, and being persuaded by the size of a vacant piece of land, readily agreed to buy the said plot and for purchasing the said plot an amount of `1,00,70,000/- was transferred by the respondent to the petitioner.
During this period, some sale deeds were also executed through the petitioner, in favour of the respondent for a land worth `70,00,000/-. Further, the petitioner had also executed a sale deed in favor of his son for a sale consideration of `18,00,000/- with respect to a piece of land out of the vacant land shown to the respondent and thereafter when the petitioner demanded more money for purchasing the remaining land, the respondent had reminded him that he had already received the total amount of `97,70,000/- and, therefore, no more money could be paid to him, as only a sum of `70,00,000/- had been spent for purchasing four pieces of land.
The petitioners, instead of purchasing a property in the name of the respondent, misappropriated her money and got executed a sale deed in favour of the petitioner’s son, knowing fully that the entire piece was shown to the respondent and she intended to purchase the entire land and made payments to the petitioner as per his demands.

Contentions of the Petitioners

Learned counsel for the petitioners had relied upon the following cases:
Vir Prakash Sharma vs. Anil Kumar Agarwal and another, (2007) 7 SCC 373
V.Y. Jose and another vs. the State of Gujarat and another, (2009) 3 SCC 78
Vinod Natesan vs. State of Kerala and others, (2019) 2 SCC 401
Moreover, submitted that for taking cognizance of commission of an offence punishable under Section 420 IPC, essential ingredients for the commission of such offence must be on the record, but in this case, there was no evidence on record with respect to fraudulent or dishonest act on the part of petitioners so as to induce or deceive the respondent or intentionally induce her to do or omit to do anything.
Lastly, it was contended on behalf of the petitioners that lodging of FIR and initiation of criminal proceedings against petitioners was a clear case of abuse of process.

Contentions of the Respondents

Learned counsel appearing for the respondent submitted that there was evidence on record to prima-facie reflect that the omission and commission on the part of the petitioners were dishonest and pre-planned, whereby they fraudulently induced the respondent to deliver the amount to purchase a property and after receiving money utilized some part thereof for the benefit of the respondent but misappropriated another part of the amount to purchase a plot in favour of the petitioner’s son.

Court’s Analysis

The Court referred to the case of Rakhi Mishra vs. State of Bihar and others, (2017) 16 SCC 772, which held that power under Section 482 CrPC for quashing of FIR is exercised by the High Court only in exceptional circumstances when even a Prima-facie case is not made out against the accused. The Magistrate has only to see whether there is prima-facie evidence on record so as to construe that there is a possibility of commission of offence by the accused.
The Court opined that for making out an offence of cheating following ingredients were essential:
Deception of a person either by making a false or misleading representation or by other action or omission.
Fraudulently or dishonestly inducing any person to deliver any property, or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
Further, the Court opined that for the purpose of constituting an offence of cheating, the complainant must show that the accused had the fraudulent or dishonest intention at the time of making the promise or representation.

Court’s Decision

The material placed before the learned Magistrate could not be said to be true in its entirety and did not prima-facie constitute any offence or make out a case against petitioners at their face value. The Court, therefore, dismissed the petition.

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