# Yogeshwar Sood v. State of U.P. & Anr

- **Citation:** (2023) 3 ILRA 1070
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-03-01
- **Case number:** Application U/S 482 No. 2229 of 2022
- **Bench:** Sameer Jain
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/yogeshwar-sood-v-state-of-u-p-anr-49776
- **Pages:** 14

## Headnote

Criminal Law - Indian Penal Code, 1860 -
Sections 409 & 420 -for offence u/s 420 IPCfraudulent or dishonest intention necessaryApplicant failed to keep their promise to make
payment-no
evidence
for
dishonest
or
fraudulent intention at the time of making
promise-merely breach of promise will not
attract section 420 IPC-sec. 409-Applicants
neither public servant-nor banker or merchant
or broker or attorney or agent-section 409 IPC
not made out-no legal evidence of entrustment
of gold chhatra to the Applicant-except verbal
allegation-proceedings quashed.
Application allowed. (E-9)
List of Cases cited:

## Text

_Characters 0–39,991 of 44,764. This is a partial read: ask again with offset=39991 for what follows._

1070 INDIAN LAW REPORTS ALLAHABAD SERIES
date, husband of petitioner (employee) is
no more, therefore, matter cannot be
remitted back to the respondents for
passing fresh order and petitioner shall be
entitled for all consequential benefits
permitted under the Rules.

21. Accordingly, petition is allowed.

22. No order as to cots.

23. Respondents are directed to pay
all consequential benefits arising out of
quashing of impugned orders to the
petitioner i.e. wife of Raj Pal Singh within
three months from the date of production of
certified copy of this order.
----------
(2023) 3 ILRA 1070
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 01.03.2023

BEFORE

THE HON'BLE SAMEER JAIN, J.

Application U/S 482 No. 2229 of 2022
With'
Application U/S 482 No. 4627 of 2022

Yogeshwar Sood ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Vineet Vikram, Sri Dhirendra Kumar
Srivastava, Sri Hari Krishna Singh, Sri
Imran Ullah

Counsel for the Opposite Parties:
G.A., Sri Bhanu Prakash Verma, Sri Shashi
Kant Shukla, Sri Amarnath Shukla

Criminal Law - Indian Penal Code, 1860 -
Sections 409 & 420 -for offence u/s 420 IPCfraudulent or dishonest intention necessaryApplicant failed to keep their promise to make
payment-no
evidence
for
dishonest
or
fraudulent intention at the time of making
promise-merely breach of promise will not
attract section 420 IPC-sec. 409-Applicants
neither public servant-nor banker or merchant
or broker or attorney or agent-section 409 IPC
not made out-no legal evidence of entrustment
of gold chhatra to the Applicant-except verbal
allegation-proceedings quashed.
Application allowed. (E-9)
List of Cases cited:
1. R.P. Kapur Vs St. of Pun. AIR 1960 SC 866

2. St. of Haryana & ors. Vs Bhajan Lal & ors.
1992 Supp (1) SCC 335

3. M/s Neeharika Infrastructure Pvt. Ltd. Vs St.
of Mah. & ors. AIR (2021) SC 1918

4. Prabhatbhai Aahir @ Parbatbai Bhimsinhbhai
Karmur & ors. Vs St. of Gujarat & anr. (2017) 9
SCC 641

5. Kapil Agarwal & ors. Vs Sanjay Sharma & ors.
(2021) 5 SCC 524

6. Hridaya Ranjan Prasad Verma Vs St. of Bihar
(2000) 4 SCC 168

7. Dalip Kaur Vs Jagnar Singh (2009) 14 SCC
696

8. Anwar Chand Sab Nanadikar Vs St. of Karn.
(2003) 10 SCC 521

9. Vijay Kumar Ghai Vs St. of W. B. (2022) 7
SCC 124

10. Indian Oil Corporation Vs NEPC India Ltd.
(2006) 6 SCC 736
(Delivered by Hon'ble Sameer Jain, J.)

1. Both the Applications U/S 482
Cr.P.C. No. 2229 of 2022 and 4627 of 2022
are connected matters and in both the
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1071
applications
cognizance
order
dated
05.11.2020 as well as entire proceedings of
Case No. 1327 of 2020 pending in the
Court of ACJM, Court No.1, Mathura
arising out of Case Crime No. 648 of 2019,
under Section 409, 420 IPC, Police Station
Kotwali, District Mathura have been
challenged, therefore, both the applications
are being decided by the common order.

2. Learned AGA does not propose to
file
any
counter
affidavit.
However,
pleadings between applicants and opposite
party
no.2
(informant)
have
been
exchanged.

3. Heard Sri Dhirendra Kumar
Srivastava and Sri Hari Krishna Singh,
learned counsels for the applicants, Sri
Amarnath Tripathi, Sri Bhanu Prakash
Verma and Sri Shashi Kant Shukla, learned
counsels for opposite party no.2 and Dr.
S.B.Maurya, learned AGA-I, for the State.

4. The instant applications under
Section 482 Cr.P.C. have been filed by the
applicants with a prayer to quash the
cognizance order dated 05.11.2022 as well
as entire proceeding of Case No. 1327 of
2020 pending in the Court of ACJM, Court
No.1, Mathura arising out of Case Crime
No. 648 of 2019, under Sections 409, 420
IPC, Police Station Kotwali, District
Mathura.

Factual Matrix

5. Opposite party no.2 lodged FIR
against applicants under Sections 409, 420
IPC on 31.08.2019 at Case Crime No. 648
of 2019 at Police Station Kotwali, District
Mathura and as per allegation made in the
FIR, informant/opposite party no.2 made a
Golden Chatra on the order of the
applicants weighing about 3.352 Kilogram
and
420
miligram
valuing
about
1,31,36,289/- and handed over the same to
the applicants on 06.04.2018 and applicants
promised him that within a week they will
make the payment and on 09.05.2018
applicants donated the Golden Chatra at
Badrinath Dham and when more than a
month passed then informant demanded his
money but applicants stated that within 2-4
months they will make the payment but
they did not make the payment and
thereafter they refused to make any
payment. According to the FIR, applicants
were having intention to cheat informant
since beginning and thus they committed
fraud.

6. After registration of the FIR,
investigation was conducted and during
investigation Investigating Officer recorded
the statement of opposite party no.2, the
informant and he reiterated the version of
the FIR. During investigation, Investigating
Officer also recorded the statements of
some independent witnesses and they stated
that applicants did some interior work of
the house of the informant and estimate of
the renovation was rupees 9.5 Crore but
informant i.e. opposite party no.2 paid only
Rs. 1.2 Crore and due to this reason some
dispute arose between applicants and
informant and applicants also filed a civil
suit in this regard against informant before
Civil Judge (Junior Division), Ludhiana
vide Case No. 7461 of 2019 and only due
to this reason informant lodged FIR of the
present case against the applicants after
cooking up false and fabricated story and in
fact informant did not want to pay the
remaining amount to the applicants. These
independent witnesses also stated that after
the alleged date of handing over the Golden
Chatra
to
the
applicants,
informant
deposited Rs. 10 Lakhs in the account of
the
firm
of
the
applicants.
After
1072 INDIAN LAW REPORTS ALLAHABAD SERIES
investigation on 16.12.2019 Investigating
Officer submitted final report in the present
matter.

7. From the record, it reflects that
during pendency of final report before the
court concerned informant i.e. opposite
party no.2 moved an application for further
investigation before Inspector General of
Police, Agra and on 06.01.2020, Inspector
General of Police, Agra transferred the
investigation from District Mathura to
District Agra and directed the SSP, Agra to
allot further investigation of the case to
some competent police officer and on the
direction issued by Inspector General, Agra
further investigation of the case was
commenced
and
during
further
investigation
subsequent
statement
of
informant i.e. opposite party no.2 was
recorded and he reiterated his earlier
version recorded by earlier Investigating
Officer
although
in
his
subsequent
statement he admitted the fact that
applicants informed him that they are in the
business of interior decoration and he gave
them a contract to renovate his house. He
further stated that applicants provided him
estimate of Rs. 9.5 Crore for renovation.
Informant i.e. opposite party no.2 also
stated that on different dates he transferred
number of amounts in the account of the
firm of applicants and made a request to
them to start the renovation work of his
house and thereafter applicants sent some
materials of about Rs. 8,48,000/- and in the
meantime applicants stated to him that they
wanted to donate a Golden Chatra at Badri
Nath Dham and they placed the order in
this regard to him and on their verbal order
he prepared a Golden Chatra of about 3.352
Kilogram and 420 miligram and cost of the
Chatra was Rs. 1,31,36,289/- and handed
over the same to the applicants on
06.04.2018 but they did not make the
payment. In his second statement opposite
party no.2 further stated that as applicants
were doing the renovation work of his
house, therefore, he deposited Rs. 10 lakhs
on 12.06.2018 in the account of the firm of
the applicants i.e. after handing over the
Golden Chatra to the applicants. Opposite
party no.2 further stated that on 12.06.2019
applicants sent legal notice to him and also
filed civil suit against him in the court of
Civil Judge (Junior Division), Ludhiana
and thereafter on 31.08.2019 he lodged FIR
of the present case.

8. During further investigation,
Investigating Officer also recorded the
statement
of
Pundereep
Goswami
Ji
Maharaj. He stated that Golden Chatra was
made by the informant.

9. During further investigation, again
investigation was transferred from District
Agra to Mathura by the order of the
Inspector General of Police, Agra on the
application of the informant i.e. opposite
party no.2 and thereafter on 14.10.2020
statement of Ashok Kumar Agrawal, the
brother of the informant was recorded and
he also stated that informant handed over
the work of renovation of his house to the
applicants and they provided estimate of
about rupees 9.5 Crore and thereafter
opposite party no.2 transferred 1.10 Crore
in the account of the firm of the applicants
and thereafter applicants sent materials of
about Rs. 1,48,000/- but they did not start
any work of renovation and thereafter they
by playing fraud got manufactured Golden
Chatra from the informant amounting to
Rs. 1,31,36,289/- weighing about 3.352
Kilogram and 420 miligram and donated
the same at Badri Nath Dham and did not
make the payment of Golden Chatra.
Ashok Kumar Agrawal, the brother of the
informant also stated that on 12.06.2018
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1073
i.e. after alleged handing over the Golden
Chatra to the applicants by the informant,
Rs. 10 Lakhs were transferred by opposite
party no.2 in the account of the firm of
applicants.

10. From the record, it further reflects
that
during
further
investigation,
Investigating Officer made query from
Badri Nath Kedar Nath Samiti and on
07.02.2020 Samiti provided its reply and as
per reply, applicants on 09.05.2018 donated
a Golden Chatra at Badri Nath Dham
weighing about 3.354 Kilogram and entry
of the same was made on 24.10.2018 at the
register of the temple. It appears from the
record that after further investigation on
16.10.2020 charge-sheet was submitted
against the applicants in the present matter
and after submission of the charge-sheet
cognizance was taken and summons were
issued to the applicants on 05.11.2020.

11. Hence the present application.

Submission on behalf of the
applicants

12. Learned counsel for the applicants
submitted that entire allegations made
against the applicants are totally false and
baseless and in fact applicants never placed
any order to the opposite party no.2 with
regard to the Golden Chhatra. He submits,
applicants are in the business of interior
designing and informant engaged them for
the purpose of renovation of his house and
in this regard an estimate of Rs. 9.5 Crore
was given by the applicants to him and
thereafter work of renovation of the house
of the informant (Opposite Party No. 2)
was started and Opposite Party No. 2
transferred Rs. 1.2 crore in the account of
the firm of the applicants but thereafter
some dispute arose between the parties
with regard to the remaining payment and
in this regard firm of the applicants sent a
legal notice to the Opposite Party No. 2 on
12.6.2019
through
its
counsel
and
demanded the remaining dues of Rs. 8.3
crore and Opposite Party No. 2 gave reply
to the same through his advocate on
26.6.2019 and stated in his reply that in
spite of advance payment of Rs. 1.2 crore
applicants did not even start renovation
work of his house and alleged that
applicants committed fraud.

13. He further submits, in reply dated
26.6.2019 Opposite Party No. 2 did not
state about the fact of Golden Chhatra and
this fact clearly suggest that only due to the
dispute arose between the parties with
regard to the payment of renovation of the
house of the informant the FIR of the
present case was lodged against the
applicants by setting up a false and
concocted story.

14. He further submitted that firm of
the applicants also replied on 19.9.2019 but
in the meantime on 31.8.2019 Opposite
Party No. 2 has lodged FIR of the present
case against the applicants. He further
submitted that there is no admissible
evidence on record which can show that
applicants placed any order for making of
Golden Chhatra. He further submitted that
the present dispute is purely civil dispute
and even if applicants failed to keep
promise to make payment of golden
chhatra as alleged then also no criminal
liability could be fastened against them.

15. He further submitted that from the
subsequent statement of the Opposite Party
No. 2 and his brother Ashok Kumar
Agrawal
recorded
during
further
investigation, it is evident that the amount
of Rs. 10 lac was transferred by Opposite
1074 INDIAN LAW REPORTS ALLAHABAD SERIES
Party No. 2 in the account of the firm of the
applicants after about two months from the
date of alleged handing over the Golden
Chhatra to the applicants and this fact
clearly suggest that there was no dispute
pending between the parties with regard to
the Golden Chhatra rather the dispute was
pending with regard to the renovation of
the house of informant which was being
done by the firm of the applicants.

16. He further submitted that as
informant/ Opposite Party No. 2 failed to
make the payment of the balance amount of
Rs. 8.3 crore to the applicants, therefore,
the firm of the applicant filed a civil suit for
damages against Opposite Party No. 2 on
21.9.2019 which is still pending. He further
submitted that except the verbal allegation
there is also no evidence on record which
can show that Opposite Party No. 2 handed
over the Golden Chhatra to the applicants.

17. He further submitted that in fact
the Golden Chhatra was not individually
donated by the applicants at Badrinath
Dham but it was handed over by the group
of devotees at Badrinath Dham and this fact
is evident from the letter of Maharshi
Mukta Seva Mission which has been
annexed as Annexure No. 19 to the
affidavit filed in support of the present
application. He further submitted that
Uttarakhand Government in the year 2021
has constituted Uttarakhand Char Dham
Management Board (in short Board) to
look after the working of the temples in the
State and abolished Badrinath Kedarnath
Mandir Samiti which earlier looked the
working of the temples in the State and
Maharshi Mukta Seva Mission through its
letter dated 15.4.2021 informed the newly
constituted
Uttarakhand
Char
Dham
Management Board that on 09.05.2018 the
Golden Chhatra was donated by groups of
devotees and also apprised the Board about
the wrong information furnished by the
earlier Samiti to the Investigating Officer
and also requested to issue correct
information. He further submits, after that
on 26.04.2021 the Board sent letter to
Maharshi
Mukta
Sewa
Mission
and
informed
that
Golden
Chhatra
was
collectively donated by large numbers of
devotees on 09.05.2018 and entry of the
same has been made in the record of the
temple. He further submits, therefore, it is
evident that the Golden Chhatra was
donated collectively by number of devotees
and not by applicants individually.

18. He further submitted that even if
the allegations are accepted then also no
offence under Section 409, 420 IPC is
made out against the applicants as there is
no evidence on record which can show that
applicants were having any intention to
cheat the informant/Opposite Party No. 2
since beginning.

19 . He further submitted that
admittedly applicants are neither public
servant nor banker nor merchant nor broker
nor attorney nor agent, therefore, offence
under Section 409 IPC is not made out
against them. He further submitted that
without any application of mind in routine
manner cognizance was taken by the Court
concerned, therefore, cognizance order
dated 5.11.2020 and proceedings pending
against the applicants before the Court
concerned are liable to quashed.

Submission made on behalf of
the respondents

20.

Learned
counsels
for
the
informant as well as
learned AGA
submitted that from the perusal of the
record it appears that applicants committed
offence under Section 409, 420 IPC and
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1075
they were having intention since beginning
to deceit the informant and in spite of
receaving the Golden Chhatra of about Rs.
1,31,36,289/- they did not pay the amount
and donated the Chhatra at Badrinath
Dham, thus committed offence of cheating
and criminal breach of trust and it cannot
be said that it was merely a breach of a
promise.

21. Learned counsel for the informant
further argued that from the perusal of the
statement of the Opposite Party No. 2 and
other witnesses it is apparant that on the
order placed by applicants Golden Chhatra
was made by the informant and he handed
over the same to them but they failed to
make the payment of the same and this fact
shows that applicants were having intention
to
cheat
the
informant.
He
further
submitted that from the letter of Badrinath
Kedarnath Mandir Samiti which was sent
by the Samiti to the Investigating Officer it
reflects that applicants were the persons
who donated the Golden Chhatra at
Badrinath Dham and at this stage it cannot
be said that the Golden Chhatra was
donated collectively by the devotees rather
there is evidence on record which can
clearly shows that applicants were the
persons who donated the same at Badrinath
Dham.

22. He further submitted that as
applicants being interior decorator were
doing some work of renovation of the
house of Opposite Party No. 2, therefore, in
fiduciary relationship without any written
agreement, on the verbal order placed by
the applicants Opposite Party No. 2 made
the Golden Chhatra and handed over it to
them and as work of renovation of the
house of the Opposite Party No. 2 was
under way, therefore, Opposite Party No. 2
even after handing over the Golden Chhatra
to the applicants transferred the amount of
Rs. 10 lacs in the account of the firm of the
applicants with regard to renovation work
and from this fact it cannot be presumed
that no dispute with regard to Golden
Chhatra was pending between the parties.

23. He further submitted that as the
dispute with regard to the payment of the
renovation of the house of the informant
and Golden Chhatra were two different
disputes, therefore, in reply to the legal
notice of the applicants, Opposite Party No.
2 did not disclose the fact about Golden
Chhatra and therefore, it also cannot be
presumed on the basis of the reply of the
legal notice given by the Opposite Party
No. 2 that no such dispute with the regard
to the payment of the Golden Chhatra was
existed.

24. He further submitted that
applicants by playing fraud with deceitful
intention duped amount of more than Rs.
1,31,00,000 of the informant. He further
submitted that as there is prima facie
sufficient evidence against the applicants
on record, therefore, Court concerned
rightly took the cognizance and issued the
summons.

25. He further submitted that the
previous
investigation
could
not
be
properly
conducted
and
with
the
connivance
of
the
applicants,
first
Investigating Officer submitted final report
in the present matter and after further
investigation on the basis of evidence
collected
during
further
investigation
charge-sheet was filed against applicants,
therefore, the instant applications filed on
behalf of the applicants are devoid of
merits and are liable to be dismissed.

Analysis
1076 INDIAN LAW REPORTS ALLAHABAD SERIES

26. I have given my thoughtful
consideration on the rival submissions
advanced by learned counsels for both the
parties and perused the material placed on
record.

27. The power of this Court with
regard to its inherent jurisdiction has been
discussed by Three Judges Bench of the
Apex Court in case of R.P. Kapur Vs.
State of Punjab AIR 1960 SC 866 and
Three Judges Bench of the Apex Court
summarised the categories of cases where
inherent power can or should be exercised
to quash the proceedings:-

(i) Where it manifestly appears
that there is a legal bar against the
institution or continuance of proceedings
for example want of sanction,

(ii) Where allegation in the first
information report or complaint if taken at
its face value and accepted in their entirety
do not constitute the offence alleged,

(iii)
Where
the
allegations
constituted an offence but there is no legal
evidence adduced or the evidence adduced
clearly or manifestly fails to prove the
charges.

28. The Apex Court in its celebrated
judgement of State of Haryana and
others Vs. Bhajan Lal and other 1992
Supp (1) SCC 335 considered in detail the
scope of this Court under Section 482
Cr.P.C. and/ or Articles of 226 of
Constitution of India and identified the
following categories in which proceedings
can be quashed and observed in paragraph
102 as:-

"102. In the backdrop of the
interpretation of the various relevant
provisions of the Code under Chapter XIV
and of the principles of law enunciated by
this Court in a series of decisions relating
to the exercise of the extraordinary power
under Article 226 or the inherent powers
under Section 482 of the Code which we
have extracted and reproduced above, we
give the following categories of cases by
way of illustration wherein such power
could be exercised either to prevent abuse
of the process of any court or otherwise to
secure the ends of justice, though it may not
be possible to lay down any precise, clearly
defined and sufficiently channelised and
inflexible guidelines or rigid formulae and
to give an exhaustive list of myriad kinds of
cases wherein such power should be
exercised.

(1) Where the allegations made in
the
first
information
report
or
the
complaint, even if they are taken at their
face value and accepted in their entirety do
not prima facie constitute any offence or
make out a case against the accused.

(2) Where the allegations in the
first
information
report
and
other
materials, if any, accompanying the FIR do
not disclose a cognizable offence, justifying
an investigation by police officers under
Section 156 (1) of the Code except under
an order of a Magistrate within the purview
of Section 155 (2) of the Code.

(3) Where the uncontroverted
allegations made in the FIR or complaint
and the evidence collected in support of the
same do not disclose the commission of any
offence and make out a case against the
accused.

(4) Where, the allegations in the
FIR do not constitute a cognizable offence
but constitute only a non-cognizable
offence, no investigation is permitted by a
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1077
police officer without an order of a
Magistrate as contemplated under Section
155 (2) of the Code.

(5) Where the allegations made in
the FIR or complaint are so absurd and
inherently improbable on the basis of
which no prudent person can ever reach a
just conclusion that there is sufficient
ground for proceeding against the accused.

(6) Where there is an express legal
bar engrafted in any of the provisions of the
Code or the concerned Act (under which a
criminal proceeding is instituted) to the
institution
and
continuance
of
the
proceedings and/or where there is a specific
provision in the Code or the concerned Act,
providing
efficacious
redress
for
the
grievance of the aggrieved party.

(7) Where a criminal proceeding is
manifestly attended with mala fide and/or
where the proceeding is maliciously instituted
with an ulterior motive for wreaking
vengeance on the accused and with a view to
spite him due to private and personal
grudge."

29. Recently Three Judges Bench of the
Supreme Court in the case of M/s Neeharika
Infrastructure Pvt. Ltd. Vs. State of
Maharashtra and others AIR (2021) SC
1918 also occasioned to discuss the scope of
Section 482 Cr.P.C. and Article 226 of
Constitution of India and observed that if a
case falls under the parameters of R.P. Kapur
case (supra) and Bhajan Lal case (supra) then
this Court is having jurisdiction to quash the
proceedings by invoking its jurisdiction under
Section 482 Cr.P.C.

30. The Three Judges Bench of the
Apex Court in case of Prabhatbhai Aahir
alias Parbatbai Bhimsinhbhai Karmur
and others Vs. State of Gujarat and
another (2017) 9 SCC 641 observed that
Section 482 Cr.P.C. is pre-faced with an
overriding provision and this Court being a
superior Court has the inherent power to
make such order as necessary (i) to prevent
an abuse of the process of any Court; or (ii)
otherwise to secure the ends of justice.

31. Again apex Court in case of Kapil
Agarwal and others Vs. Sanjay Sharma
and others (2021) 5 SCC 524 observed
with regard to power of this Court under
Section 482 Cr.P.C. as:-

"As observed and held by this
Court in catena of decisions, inherent
jurisdiction under Section 482 Cr.P.C.
and/or
under
Article
226
of
the
Constitution is designed to achieve
salutary
purpose
that
criminal
proceedings ought not to be permitted to
degenerate into weapon of harassment.
When the Court is satisfied that criminal
proceedings amount to an abuse of
process of law or that it amounts to
bringing pressure upon accused, in
exercise
of
inherent
powers,
such
proceedings can be quashed."

32. The law with regard to the power
of this Court under Section 482 Cr.P.C. is
settled that this Court cannot scuttle a
legitimate prosecution at its inception and
the inherent power should be used
sparingly with abundant caution but at the
same time if it appears that even if entire
allegations are accepted and even then no
offence is made out or proceedings has
been initiated with mala-fide intention only
to harass the accused persons then in the
interest of justice and to secure the ends of
justice this Court should invoke its
jurisdiction under Section 482 Cr.P.C. and
may quash the proceedings.
1078 INDIAN LAW REPORTS ALLAHABAD SERIES

33. In case at hand, proceedings
pending against the applicants relates to
Sections 409, 420 IPC and therefore,
question before this Court is, whether the
offences of cheating and criminal breach of
trust have been made out from the face
value of the allegations. Following the well
settled principle of law, contents of the
allegations would have to be taken as a
whole to deduce as to whether the
ingredients of the offence have been duly
established.

34. In the present matter, the FIR was
lodged on 31.8.2019 and according to the
FIR applicants placed an order for Golden
Chhatra and on the order of the applicants a
Golden Chhatra was made by the informant
and it was handed over to them and
applicants promised that within a week
they will make the payment but when more
than one month was passed then informant
demanded their dues but applicants did not
make the payment, therefore, as per
allegation made against the applicants, they
failed to fulfil their promise. Therefore,
question arises if allegations made against
the applicants are accepted then offences
under Section 420, 409 are made out or not.

35. The ingredients of the offence of
cheating
and
dishonestly
inducing
delivering of property are spelt out in
Section 420 of IPC it reads as follows:

420. Cheating and dishonestly
inducing delivery of property.--Whoever
cheats and thereby dishonestly induces the
person deceived to deliver any property to
any person, or to make, alter or destroy the
whole or any part of a valuable security, or
anything which is signed or sealed, and
which is capable of being converted into a
valuable security, shall be punished with
imprisonment of either description for a
term which may extend to seven years, and
shall also be liable to fine.

36. Therefore, for offence under
Section 420 IPC cheating and dishonest
inducement to deliver the property is
necessary.

37. In Hridaya Ranjan Prasad
Verma Vs. State of Bihar (2000) 4 SCC
168, the Apex Court interpreted Section
415 and 420 of IPC and hold that
fraudulent and dishonest intention is a precondition to constitute the offence of
cheating the relevant extract from the
judgment are as followes:-

"14. On a reading of the section it
is manifest that in the definition there are
set forth two separate classes of acts which
the person deceived may be induced to do.
In the first place he may be induced
fraudulently or dishonestly to deliver any
property to any person. The second class of
acts set forth in the section is the doing or
omitting to do anything which the person
deceived would not do or omit to do if he
were not so deceived. In the first class of
cases the inducing must be fraudulent or
dishonest. In the second class of acts, the
inducing must be intentional but not
fraudulent or dishonest.

15. In determining the question it
has to be kept in mind that the distinction
between mere breach of contract and the
offence of cheating is a fine one. It depends
upon the intention of the accused at the
time of inducement which may be judged by
his subsequent conduct but for this
subsequent conduct is not the sole test.
Mere breach of contract cannot give rise to
criminal prosecution for cheating unless
fraudulent or dishonest intention is shown
right at the beginning of the transaction,
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1079
that is the time when the offence is said to
have been committed. Therefore it is the
intention which is the gist of the offence. To
hold a person guilty of cheating it is
necessary to show that he had fraudulent or
dishonest intention at the time of making
the promise. From his mere failure to keep
up promise subsequently such a culpable
intention right at the beginning, that is,
when he made the promise cannot be
presumed." (emphasis supplied)

38. In Dalip Kaur Vs. Jagnar Singh
(2009) 14 SCC 696, Apex Court held that a
dispute arising out of a breach of an
agreement would not amount to an offence
of cheating under Section 415 and 420 IPC
and observed as:-

"9. The ingredients of Section 420
of the Penal Code are:

"(i) Deception of any persons;

(ii) Fraudulently or dishonestly
inducing any person to deliver any
property; or

(iii) 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."

10. The High Court, therefore,
should have posed a question as to whether
any act of inducement on the part of the
appellant has been raised by the second
respondent and whether the appellant had
an intention to cheat him from the very
inception. If the dispute between the parties
was essentially a civil dispute resulting
from a breach of contract on the part of the
appellants by non-refunding the amount of
advance the same would not constitute an
offence of cheating. Similar is the legal
position in respect of an (2009) 14 SCC
696 offence of criminal breach of trust
having regard to its definition contained in
Section 405 of the Penal Code. (See Ajay
Mitra v. State of M.P. [(2003) 3 SCC 11 :
2003 SCC (Cri) 703])" (emphasis supplied)

39. Therefore, from the prenciple laid
down by the Apex Court with regard to an
offence under Section 420 IPC it appears
that for offence under Section 420 IPC it is
necessary that a person had fraudulent or
dishonest intention at the time of making
the promise and from his mere failure to
keep up promise subsequently such a
culpable intention right at the beginning
that is when he made the promise cannot be
presumed.

40. Applying the above principle in
case at hand, I find no offence under
Section 420 IPC is made out against the
applicants as from the allegation it appears
that applicants failed to keep their promise
to make the payment of alleged Golden
Chhatra and there is no evidence on record
which can suggest that applicants were
having dishonest and fradulent intention at
the time of making the promise and from
the allegation it appears that they merely
breached the promise which does not
attract Section 420 IPC.

41. Section 409 IPC deals with
criminal breach of trust by public servant or
by banker, merchant or agent and reads as
follows:-

409. Criminal breach of trust by
public servant, or by banker, merchant or
agent.--Whoever, being in any manner
entrusted with property, or with any
dominion over property in his capacity of a
public servant or in the way of his business
1080 INDIAN LAW REPORTS ALLAHABAD SERIES
as a banker, merchant, factor, broker,
attorney or agent, commits criminal breach
of trust in respect of that property, shall be
punished with [imprisonment for life], or
with imprisonment of either description for
a term which may extend to ten years, and
shall also be liable to fine.

42. Therefore from the perusal of
Section 409 IPC it appears that who ever
being public servant or in way of his
business as banker, merchant, factor,
broker, attorney or agent commits offence
of criminal breach of trust then he will be
liable under Section 409 IPC.

43. In case at hand, applicants are
neither public servants nor they are bankers
nor they in way of their business as a
merchant or broker or attorney or agent
committed the alleged offence, therefore,
offence under Section 409 IPC against the
applicant is also not made out.

44. However, charge-sheet against the
applicants has not been filed under Section
406 IPC but question also arises whether
offence of criminal breach of trust
stipulated under Section 405 IPC against
the applicants is made out.

45. In Section 406 IPC punishment
has been provided for offence of criminal
breach of trust and offence of criminal
breach of trust has been defined under
Section 405 IPC which read as followes :-

405. Criminal breach of trust.--
Whoever, being in any manner entrusted
with property, or with any dominion over
property, dishonestly misappropriates or
converts to his own use that property, or
dishonestly uses or disposes of that
property in violation of any direction of law
prescribing the mode in which such trust is
to be discharged, or of any legal contract,
express or implied, which he has made
touching the discharge of such trust, or
wilfully suffers any other person so to do,
commits "criminal breach of trust".

Explanation
2[1].--A
person,
being an employer 3[of an establishment
whether exempted under section 17 of the
Employees'
Provident
Funds
and
Miscellaneous Provisions Act, 1952 (19 of
1952), or not] who deducts the employee's
contribution from the wages payable to the
employee for credit to a Provident Fund or
Family Pension Fund established by any
law for the time being in force, shall be
deemed to have been entrusted with the
amount of the contribution so deducted by
him and if he makes default in the payment
of such contribution to the said Fund in
violation of the said law, shall be deemed
to have dishonestly used the amount of the
said contribution in violation of a direction
of law as aforesaid.]

[Explanation 2.--A person, being
an employer, who deducts the employees'
contribution from the wages payable to the
employee for credit to the Employees' State
Insurance Fund held and administered by
the
Employees'
State
Insurance
Corporation
established
under
the
Employees' State Insurance Act, 1948 (34
of 1948), shall be deemed to have been
entrusted
with
the
amount
of
the
contribution so deducted by him and if he
makes default in the payment of such
contribution to the said Fund in violation of
the said Act, shall be deemed to have
dishonestly used the amount of the said
contribution in violation of a direction of
law as aforesaid."

46. The offence of criminal breach of
trust contains two ingredients (a) entrusting
3 All. Yogeshwar Sood Vs. State of U.P. & Anr.
1081
any person with property, or with any
dominion over the property, and (b) the
person
entrusted
dishonestly
misappropriated or converts to his own use
that property to the detriment of the person
to entrusted it.

47.

In
Anwar
Chand
Sab
Nanadikar Vs. State of Karntaka (2003)
10 SCC 521, the Apex Court observed as:-

"7. The basic requirement to
bring home the accusations under Section
405 are
the
requirements
to prove
conjointly (1) entrustment, and (2) whether
the accused was actuated by the dishonest
intention or not misappropriated it or
converted it to his own use to the detriment
of the persons who entrusted it. As the
question of intention is not a matter of
direct proof, certain broad tests are
envisaged which would generally afford
useful guidance in deciding whether in a
particular case the accused had mens rea
for the crime."

48. In Vijay Kumar Ghai Vs. State
of West Bengal (2022) 7 SCC 124 held as
followes:-

"28. "Entrustment" of property
under Section 405 of the Penal Code,
1860 is pivotal to constitute an offence
under this. The words used are, "in any
manner entrusted with property". So, it
extends to entrustments of all kinds
whether to clerks, servants, business
partners or other persons, provided they
are holding a position of "trust". A
person who dishonestly misappropriates
property entrusted to them contrary to the
terms of an obligation imposed is liable
for a criminal breach of trust and is
punished under Section 406 of the Penal
Code."

49. Therefore, from the above
principles laid down by the Apex Court,
merely breach of contract does not attracts
offence of criminal breach of trust and for
offence under Section 405 IPC entrustment
is necessary.

50. In case at hand, there is no legal
evidence of the entrustment of Golden
Chhatra to the applicants on record except
the
verbal
allegation
made
by
the
informant. Further, there is also no legal
evidence on reord, which can show that
applicants placed an order to the informant
for Golden Chhatra except the verbal
allegation made by the imformant. It
further appears that evidence adduced by
prosecution is not sufficient to prove the
charges against the applicants.

51. The three judges Bench in the
case of R.P. Kapoor (supra) held that if
there is no legal evidence available on
record or evidence adduced fails to prove
the charges, then proceedings can be
quashed.

52. Thus, in view of the principle laid
down in the case of R.P. Kapoor (supra)
offence under Section 405 IPC is also not
made out against the applicants.

53. Further, from the perusal of the
material placed on record, it appears that
applicants were in the business of interior
decoration and informant engaged them for
renovation of his house and applicants
provided him an estimate of Rs. 9.5 crore
for renovation and some dispute of amount
arose between the parties and in this regard
a legal notice was sent by the firm of the
applicants to the informant in the month of
May, 2019 and informant in the month of
June, 2019 replied the same but in the reply
it is no where stated about the dispute with
1082 INDIAN LAW REPORTS ALLAHABAD SERIES
regard to Golden Chhatra and thereafter on
31.8.2019 FIR of the present case was
lodged. This fact suggest that a dispute
with regard to payment of renovation of the
house of informant was pending between
applicants and the informant and this fact
also has been admitted by the informant
and his brother in their statements recorded
during further investigation, therefore, it
appears that informant instituted the present
proceeding with mala fide intention and
ulterior motive for wrecking vengeance due
to private and personal grudge. The Apex
Court in case of Bhajan Lal (supra) held
that if any proceeding has been initiated
with mala fide intention due to personal
grudge then it should be quashed.

54. Further, the dispute in hand
appears to be primarily civil dispute and
law is settled that a criminal prosecution
should not be allowed to continue if it
attracts civil liability. In case of Indian Oil
Corporation Vs.