Offences Under Sections 405 & 420 Of IPC Are Mutually Anti-Thetical And Cannot Stand Together: Rajasthan High Court

The Rajasthan High Court clarified that the offences under Sections 405 and 420 of the Indian Penal Code (IPC) are mutually anti-thetical and cannot stand together.

The Jodhpur Bench was deciding a criminal miscellaneous petition relating to a case in which an FIR was registered for the offences under Sections 420 and 406 of IPC, giving it a colour of criminal culpability.

A Single Bench of Justice Arun Monga observed, “There is yet another aspect of the case. The offences under Section 405 IPC and section 420 IPC are mutually anti-thetical and cannot stand together. In the case of Section 405 IPC, the property is delivered by the owner in trust to the accused and there is no element of dishonesty on the part of the accused at the inception i.e. before or time of entrustment of the property to him, but the element of dishonesty of the accused develops/arises subsequent to the entrustment of the property to him. As against this, for applicability of section 420, it is necessary to show that element of dishonesty of the accused existed prior to and/or at the time of the delivery of the property to him i.e., at the inception itself.”

The Bench said that both Sections 405 and 420 of the IPC operate in distinctly different domains i.e., entrustment versus inducement. It noted that Section 405 deals with entrustment, where the victim places trust in the accused by entrusting property, and any breach of this trust by the accused directly hurts the victim and in contrast, Section 420 pertains to inducement, where the accused actively approaches the victim, often through misrepresentation or deception, leading the victim to mistakenly believe in his honesty and part with their property under false pretences/inducement.

“Therefore, entrustment centers on a breach of existing trust, while inducement involves deceit from the outset”, it added.

Advocate Mahendra Singh Rajpurohit appeared for the petitioner while Public Prosecutor S.S. Rajpurohit appeared for the respondent and Advocate Shobha Prabhakar appeared for the complainant.

In this case, an FIR was registered against two persons for alleged offences under Sections 406 and 420 of IPC. The gist of allegations was that they purchased goods and did not pay for the same despite delivery. The investigation ensued and police seized the goods namely Guar Gum stated to be weighing a total of about 47,815 Kgs. valued at a total amount of Rs. 25,54,807/-.

During the investigation of the case, the goods in question were seized/recovered from the premises of the petitioner/accused and the same were then in the possession of the police. The petitioner was, therefore, before the High Court seeking release of the said goods, being a perishable commodity. He stated that he is a bonafide purchaser of the goods and paid price thereof against written receipt issued by the co-accused in the FIR.

The High Court in view of the above facts elucidated, “The prosecution thus must prove the elements of entrustment and dishonest breach of terms of entrustment to secure a conviction. This is essential for discharge of fiduciary responsibilities and ensuring that entrusted property is handled as per law and intended by the terms of the trust or legal agreement.”

“Adverting now to section 420 IPC, a sine qua non for attracting criminal liability there under is the element of cheating and, thereby, dishonestly inducing the person deceived to deliver any property to any person. The present case being a simple sale of goods and its delivery by the complainant to Narendra Jhanwar, it cannot be said that the complainant was cheated and thereby dishonestly induced by the accused to deliver the goods to the latter. In my opinion, the allegations in the FIR also do not even disclose the commission of an offence under section 420 IPC”, it further noted.

The Court emphasised that the act of cheating where a person deceives someone ought to be such, whereby the deceived person is induced to:

• Deliver any property to another person.

• Make, alter, or destroy the whole or any part of a valuable security.

• Modify or destroy anything signed, sealed, and capable of being converted into a valuable security.

“The provision thus highlights the serious consequences of using deceit to manipulate others into parting with property or altering valuable documents”, it said.

The Court observed that it is for the complainant to institute appropriate civil proceedings for recovering his claimed money from the debtor and not for the police officials to substitute themselves as his civil recovery agents under the garb of doing the investigation by misusing their khaki uniform.

“Before parting, to sum up the discussion, it is considered imperative to direct the police officials in respondent State of Rajasthan that, before they register FIRs in matters of alleged offences under sections 405/406 and 420 of IPC [corresponding Sections 316 and 318 of Bhartiya Nyaya Sanhita (BNS) 2023], where the transaction is purely commercial, such as sale-purchase of goods or even immovable property, and the interest/title in the goods/property has passed to the purchaser, to conduct a mandatory preliminary enquiry. Unless the report thereof shows that there is prima facie material suggestive of commission of offence, FIR ought not to be registered. The preliminary enquiry must be conducted with certain alacrity (a week or 10 days at the most) so as to not let the alleged offender gain advantage to either destroy the evidence or to abscond or otherwise take any other advantage during the PE”, it also directed.

The Court concluded that the continuance of investigation into the FIR in question and/or criminal trial arising there from, if any, depending upon the outcome of the investigation, would cause undue harassment and unnecessary ordeal to the petitioner and the other co-accused persons.

Accordingly, the High Court allowed the petition and quashed the FIR and consequential proceedings against the accused.

Cause Title- Rana Ram v. State of Rajasthan & Anr. (Neutral Citation: 2024:RJ-JD:33404)

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