Dishonest Inducement Sine Qua Non To Attract Section 420 IPC: SC Reiterates Concerns On Growing Tendency To Convert Purely Civil Disputes Into Criminal Cases
|The Supreme Court reiterated that there has been a growing tendency in business circles to convert purely civil disputes into criminal cases while quashing an FIR due to a lack of dishonest inducement.
The Court stated that dishonest inducement was the sine qua non to attract the provisions of Sections 415 and 420 of IPC. While the FIR lodged against the appellant, even if taken at its face value, did not disclose the ingredients to attract the provision of Section 420 of IPC.
Justice B.R. Gavai, Justice Rajesh Bindal, and Justice Sandeep Mehta observed, “For attracting the provision of Section 420 of IPC, the FIR/complaint must show that the ingredients of Section 415 of IPC are made out and the person cheated must have been dishonestly induced to deliver the property to any person; or to make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.”
Sr. Advocate S. Nagamuthu represented the appellant, while Sr. AAG V. Krishnamurthy appeared for the respondents.
A complainant had lodged an FIR against the appellant for offences under Section 420 read with Section 34 of the IPC. the Madras High Court rejected the petition of the appellant under Section 482 of Cr.P.C for quashing of the FIR stating that the Court could not interfere with the investigation upon commission of a cognizable offence.
The complainant helped the appellant in clearing a hand loan by transferring the money through both bank transactions and cash payments, with the condition that the appellant repay the sum within 20 months.
Various properties were mortgaged and transferred to the complainant to secure repayment, yet the appellant defaulted. Subsequently, the appellant fraudulently cancelled the power of attorney and sold properties without notice to the complainant.
The Court perused the FIR and the charge-sheet which revealed that there was no transaction of any nature directly between the appellant and the complainant.
The Court explained that to attract the provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses:
- the deception of any person;
- fraudulently or dishonestly inducing that person to deliver any property to any person; and
- dishonest intention of the appellant at the time of making the inducement.
Accordingly, the Supreme Court allowed the appeal.
Cause Title: A.M. Mohan v. The State & Anr. (Neutral Citation: 2024 INSC 233)
Appearance:
Appellant: Sr. Advocate S. Nagamuthu; AOR Bhavana Duhoon; Advocates S. Hariharan, S. Sathiaseelan, Amaan Shreyas, Mannat Tipnis and Anshul Syal
Respondents: Sr. AAG V. Krishnamurthy; AOR D. kumanan and Lakshmi Ramamurthy; Advocates Sheikh F. Kalia, Deepa. S and G. Ananda Selvam