Mere breach of contract cannot give rise to criminal prosecution for cheating

Further, on careful reading of the charge, it appears that the Court has framed the charges of offences under Sections 409, 420, 467, 468, 471 and 120-B of IPC. On reading of provisions of IPC, of which charges are framed against the petitioners as well as principle laid down in this regard by the Hon'ble Apex Court in its various pronouncements, before applying the Section 409 of IPC, consideration of Section 405 of IPC is necessary. Bare reading of Section 405 IPC shows that the accused is either entrusted with a property or acquires dominion over the property and misappropriates the same dishonestly or converts the same for its own use or dishonestly uses or disposes of that property. In criminal breach of trust, the person comes into possession of a property honestly but he develops dishonest intention subsequent to his acquiring dominion over the property by way of entrustment or otherwise. To constitute the offence of criminal breach of trust following ingredients must be fulfilled:-

(i) There has to be some property.
(ii) The said property must be entrusted to someone with or without any contract.
(iii) The dominion of the property was shifted from complainant to the accused.
(iv) The accused person refuses to return/restore the said property to the rightful owner when demanded.
(v) The accused having misappropriated/converted to its own use/disposed the property refuses to restore the property to the complainant/lawful owner.

15. When offence of criminal breach of trust committed by any public servant or by banker merchant or agent then they shall be punished under Section 409 of IPC.

16. Further in order to apply section 420 IPC, the essential ingredients are:-

(i) cheating;
(ii) dishonestly inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security, and
(iii) mens-rea of the accused at the time of making the inducement."

17. Further, under the IPC, the cheating is defined in Section 415 and on reading of the said provision in the light of legal verdicts passed in this regard, the following ingredients are necessary to constitute the offence of cheating :-

(1) Deception of any person.
(2) (a) Fraudulently or dishonestly inducing that person;
(i) to deliver any property to any person; or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing that person 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 that person in body, mind, reputation or property.

Order of process issue u/s.204 of Cr.P.C. can not be passed summarily and without applying judicial mind

A  perusal of this impugned summoning order indicates that learned Magistrate had noted in the impugned order the contents of complaint and evidences u/s 200 and 202 Cr.P.C. but had neither any discussion of evidence was made, nor was it considered as to what overt act had allegedly been committed by accused. This contention of learned counsel for the applicants cannot be ruled out that leaned counsel have noted the contents of complaint and statements without considering its probability or prima facie case, and whether he had actually considered statements u/s 200, 202 Cr.P.C. or the documents of the original. At stage of summoning, the Magistrate is not required to meticulously examine or evaluate the evidence. He is not required to record detailed reasons. A brief order which indicate the application of mind is all that is expected of him at the stage. [Para No.7]

8. But in impugned order there is nothing which may indicate that learned Magistrate had even considered facts of the case in hand before passing the summoning order. Impugned order clearly lacks the reflection of application of judicial discretion or mind. Nothing is there which may show that learned Magistrate, before passing of the order under challenge had considered facts of the case and evidence or law. Therefore it appears that, in fact, no judicial mind was applied before the passing of impugned order of summoning. Such order cannot be accepted as a proper legal judicial order passed after following due procedure of law. [Para no.8]

9. In ruling "M/s. Pepsi Food Ltd. & another vs. Special Judicial Magistrate & others, 1998 UPCrR 118" Hon'ble Supreme Court held :-

"Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning the accused. Magistrate had to carefully scrutinize the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."