Partial Payment Does Not Amount To ‘Cheating’ Unless Fraudulent Intention Is Shown From Beginning Of Transaction: Calcutta HC

Observing that legislature intends to criminalize only those who breach and is accompanied by fraudulent, dishonest, or deceptive inducements, the Calcutta High Court said that the continuation of the proceeding pending against the present Petitioners will be sheer abuse of the process of court in view of the fact that there is a remote chance of convicting them either under section 420 or under section 406 of IPC, based on the materials available in the record.

A Single Judge Bench of Justice Ajoy Kumar Mukherjee observed that “someone’s inability to pay a portion of the price of goods purchased by him cannot give rise to a criminal prosecution or criminal breach of trust or cheating unless fraudulent and dishonest intention is shown right from the beginning of the transaction, as mens rea is the crux of the offence”.

Advocate Anirban Banerjee appeared for the Petitioner.

Going by the background of the case, the opposite party filed a complaint alleging that the first Petitioner had purchased jute from him, but refused to pay the amount in return. This was however opposed contending that the allegations are completely frivolous. It was also submitted that whatever disputes existing between the parties, they have been amicably settled and the opposite party voluntarily not pressed the earlier complainant.

From the allegations leveled by the opposite party against the Petitioner, the High Court found that the Petitioners have cheated him by not paying the price of the jute which was sold by the Opposite Party.

“However, in this complaint he admitted that earlier he has initiated C.R. Case No. 61 of 2018 and after initiation of that proceeding the petitioners/accused paid Rs. 5,00,000/- and took time to make the rest payment and on believing such words he had withdrawn the earlier proceeding, but the petitioner herein subsequently refused to make the rest payment for which he had lodged the present complaint”, noted the Court.

The Bench therefore clarified that even if the contents of the complaint is taken to be true that the Petitioner had purchased jute from the opposite party but refused to pay the rest amount, no dishonest representation or inducement could be found or inferred right from the beginning, since according to complaint the Petitioner has made part payment.

Hence, “it cannot be said that right from the beginning of the transaction, the Petitioner had any fraudulent or dishonest intention i.e. the mens rea”, added the Bench.

Accordingly, the High Court quashed the proceedings.

Cause Title: Girish Lahoti and Anr. v. Firdous Alam

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