Is it cheating?

Is it cheating?

 

Now a day’s a number of criminal cases are being filed on the failure to perform the agreement to sell or execute the sale deed in favor of the buyer. But the question that comes to everybody’s mind is whether the same amount to cheating as well as criminal breach of trust on the part of the seller/accused or is it just a breach of the contract and the remedy lies in the civil court seeking specific performance of the contract. There are cases wherein the buyer/complainant forge the signature of the seller or takes his signature secretly and then demand the sale of the particular property wherein no agreement or contract was ever entered into between the buyer and seller.

 

The courts are failing to take note of the fact that a number of fresh cases are coming forward because of the rise in the price of the property and some of them are filed for ulterior motives best known to the buyers/complainants. Now the question comes whether failure on the part of the seller to execute the document if at all entered into between the buyer and seller amounts to cheating as well as criminal breach of trust or the true remedy lies before the civil court seeking specific performance of the contract. In order understand the same let me explain what are the ingredients which need to be satisfied before a case for cheating or criminal breach of trust wherein the seller fails to perform his part of the contract.

The first and paramount ingredient for an offence of criminal breach of trust to be made out it is required to be shown that some property was entrusted to the accused or he having dominion over such property dishonestly misappropriated or converted for his own use that property and the word cheating has been defined under Section 415 IPC, which provides that, whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived 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, is said to cheat. It is now well settled legal position that in order to constitute an offence of cheating the intention to deceive should be in existence at the time when the inducement was made.

Now if we see that the mere handing over of the sale consideration by the buyer/complainant to the seller was entrustment or the seller had dominion over it in any manner on behalf of the complainant when the parties had themselves entered into the agreement to sell. The answer to same is NO because the Hon’ble Rajasthan High Court in “Raghunath Meena & Anr State of Rajasthan” held that when the essential ingredient to make an act of an accused to be criminal breach of trust within the meaning of Section 405 IPC is absent, the offence under Section 406 IPC cannot be said to be made out even prima facie against the seller, therefore the FIR to that extent is liable to be quashed. And in so far as the cheating part is considered the Hon’ble Court has held that for an offence of cheating a person had fraudulent or dishonest intention at the time of making the promise to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act of committing cheating, but at the same time it is also well settled legal position that subsequent conduct of the accused is also a relevant factor to infer whether he had fraudulent or dishonest intention at the inception i.e. when the offence was committed.

Cases of these nature are coming up when the builder fails to deliver the possession in the time bound manner or delays the possession, but the courts time and again are applying the same principle in order to find out whether the case of cheating is made out or not.

 

Warm Regards

Kapil Chandna Advocate (Supreme Court of India)

Advocate.kapilc@gmail.com

9899011540, 9911218741

 

 

How your Security cheque can save you from cheque bouncing offence under NI 138

A cheque is defined under the Negotiable instrument act and if a cheque is bounced and liability on cheque is not discharged,it creates an offence under section 138 NI act, now the presumption under section 139 of the NI act  is a rebuttable presumption and that can be discharged by the accused if he can show there is no legally enforceable debt at the time cheque was issued. Now security cheque is on the different footing than ordinary cheque, but security cheque is still a cheque it attracts provisions of s. 138 and 139 though it can be countered. Basically a security cheque is issued to ensure the performance of the contract and in case there is a breach the security cheque can be realized. Now does breach of contracts creates a legally enforceable debt this needs to be tested and held by various case laws that

If the cheques were taken only as security for prompt repayment and those cheque were not indischarge of any debt or liability. The date on which cheques were taken there was no debt or liability Accused cannot be prosecuted under NI 138.

In the case of Joseph Vilangadan (Supra) the facts were that the Directors had given certain cheques as refundable security deposits to ensure due performance of their work. In the given facts and circumstances it was held that there did not exist any debt or liability and the cheques were given solely for the purpose of security and hence no action under section 138 of the Act was maintainable.

If there was no debt or liability at that point of time while issuing the cheque

In Shreyas Agro Services Pvt. Ltd. vs Chandrakumar S.B. on 16 February, 2006

The very scheme of procedure adopted shows that the cheques are not issued in respect of any current existing ascertained liability. The words “for discharge of any debt or other liability” inSection 138 of N.I. Act should be interpreted to mean current existing or past ascertained liabilities. The cheque issued in respect of future liabilities not in existence as on the date of cheque would not attract prosecution Under Section 138 of N.I. Act.

So even if security cheque is bounced the prosecution can be initiated and only defence is that there was no legally enforceable debt.

Thanks & Regards,

Nitish Banka

(Advocate Supreme Court)

nitish@lexspeak.in

9891549997

Mutual Consent Divorce-When your spouse is in another city-Is it possible?

The concept and the idea of mutual consent divorce is envisaged in section 13 B of Hindu Marriage Act, it is the easiest form of divorce in India till now, however still the requirement of section 13 B is that both thee the spouses make a motion before the court and then court will analyse the consent of the spouses and then the divorce will be decreed, Further the requirement of this section is that two motions is to be presented within the gap of 6 months. Now lets suppose that if this six month time gets over and the other spouse has left the city and there is no chance of reconciliation in the Marriage and he/she cant come back because of personal difficulties to file the second motion, so a direct question comes into the mind is that is the mutual consent divorce possible? the answer to this question is yes.

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Why Anticipatory Bail

The necessity to grant anticipatory bail arises mainly because sometimes influential persons try to implicate their rivals in false case for the purpose of disgracing them or for other purpose by getting them detained in Jail for some days to get their work done indirectly.  In recent times since the rise of property prices and many civil case coming up by the plaintiff to seek their rights and if the opposite party feels that the plaintiff has good case to win, the opposite party plans and in fact start to file the false and frivolous criminal cases against the plaintiff to put a pressure and this is where the Anticipatory bail becomes a much needed thing (I have been dealing with some cases personally wherein the opposite parties by making the false and forged documents are filing the false criminal cases and trying to harass the plaintiff either to withdraw the present case or settle on their terms) But indeed the legislature in its wisdom have felt the atmosphere going around as many a cases were coming before the courts with the same pattern therefore the present provision of Anticipatory Bail is brought in the Cr.P.C which was not there originally. Apart from false cases, where there are reasonable grounds for holding a person accused of an offence is not likely to abscond or otherwise misuse his liberty while in bail, there seems no justification to require him first to submit to the custody, remain in prison for some days and then apply for bail.

Anticipatory bail means grant of bail to a free person in anticipation of his possible arrest for some offence and in the absence of any order of arrest against him. Grant of bail presupposes that the person is in custody of police or court, and if not in custody, is required to surrender to such custody.  Hon’ble Supreme Court in catena of cases has laid down the following guidelines/ propositions regarding Anticipatory Bail:-

  1. The distinction between an ordinary bail and anticipatory bail is that the former being after the arrest means release from custody of Police, the latter being in anticipation of arrest is effective at the very moment of arrest.
  2. The High Court and the Sessions Court have been given wide powers- discretionary- left free in the use of their judicial discretion to grant bail on the facts and circumstances of each case.
  3. The court must apply its own mind and decide the question without leaving it to be decided by the magistrate under section 437 and when occasion arises.

Not Blanket Order

  1. The applicant must show by disclosing specific facts and events that he has reasons to believe, the existence of which is sine qua non of the exercise of power by the court and non vague apprehension that he may be arrested for a non-bailable offence so that court may take care to specify the offence or offences in respect of which alone the order will be effective and not a blanket order.

 

  1. Though the power conferred under section 438 of the Code can be described as of an extraordinary character, but this does not justify the conclusion that the power must be exercised in exceptional circumstances only because it is of an extraordinary character. Nonetheless, the discretion under the section has to be exercised with due care and circumspection depending on circumstances justifying its exercise.

 

  1. The filing of the FIR is not a condition precedent to the exercise of power under section 438. The imminence of a likely arrest founded on a reasonable belief can be shown to exist even if an FIR is not yet filed.

 

  1. An Anticipatory Bail can be granted even after an FIR is filed so long as the applicant has not been arrested.

 

  1. An interim bail order can be passed under section 438 of the Code of the code without notice to the Public Prosecutor but notice should be issued to the Public prosecutor or to the Government Advocate forthwith and the question of bail should be re-examined in the light of respective contentions of the parties. The ad-interim order too must conform to the requirements of the section and suitable conditions should be imposed on the applicant even at that stage.

 

  1. Both the High Court as well as the session’s court have the competence and jurisdiction to entertain the anticipatory bail application. It is for the applicant or the petitioner to choose either of these; Onkar Nath Agrawal V.State, 1976 Cr LJ 1142.

 

 

  1. Two basic principles to be kept in mind while considering the question of grant of anticipatory bail are:
    1. That there should be no likelihood of the accused absconding :
      1. The length of his residence in community;
      2. His employment, status, history and financial condition;
  • His family ties and relationships;
  1. His reputation, character and monetary condition;
  2. His prior criminal record including any record of prior release on re-cognizance or on bail;
  3. The identity of the responsible members of the community who would vouch for his reliability;
  • The nature of the offence charge, and the apparent probability of conviction and the likely sentence in so far as these facts are relevant to the risk of non-appearance;
  • Any other factor indicating the ties of the accused to the community or bearing the risk of willful failure to appear.
  1. There should be no likelihood of the accused misusing his liberty.

Some Illustrative Case Laws are:

  • Kusum Rani Bansal v. State of Punjab, 1978 Cur LJ (Cr) 235 (236) (P&H); The investigation was on and over eight months had passed but nothing incriminating had been discovered. The conditional pre-arrest bail to the petitioners was granted. The condition was that they will/would be available for investigation as and when required.
  • Chand Mohd v. State, Cr LR 507 (508) (Raj). It was observed that it would not be unreasonable to enlarge the accused on bail where it appeared that the condition of the injured had been improved and injuries caused by a sharp object was not sufficient to cause death.
  • Dilbag Singh Deleka v. State, 1997 Cur LJ 237 (247), it has been held that vague allegations in the FIR and the same remained unsubstantiated up to the date of hearing of the petition, is a fit case for the grant of anticipatory bail.
  • S.Mathur V. State of Rajasthan, 1981 Cr Cas 281 The main consideration where anticipatory bail should not be refused are: the nature of the accusation and the evidence besides the status of the accused.

 

Since the grounds abovementioned are not exhaustive, merely illustrative and every bail application has to be decided on its own facts and circumstances.

 

Kapil Chandna Advocate (Supreme Court of India)

9899011450,9911218741