P.K. Mohanti, J.@mdashThis appeal is directed against an order of Shri A.C. Sarangi, Judicial Magistrate. First Class, Cuttack acquitting the Respondent of the charge u/s 420 Indian Penal Code.
2. The Appellant as complainant filed a complaint petition alleging that the Respondent and his mother Mrs. Ramala Kar were heavily indebted to him and when he pressed for payment of his dues the Respondent issued a crossed cheque No. CTK 25/205-185 dated 30-4-1967 for a sum of Rs. 9.500/- on the United Bank of India Limited, Cuttack. The Appellant endorsed the cheque in favour of Shri M.K.C. Rao, Advocate (P.W. 3) who sent the cheque for encashment through the State Bank of India, Cuttack thrice and on each occasion it was dishonoured with the endorsernent "Full cover not received". It was alleged that the Respondent knew that he had no bank balance sufficient to cover the cheque and he issued the cheque with the dishonest motive of silencing the Appellant when he demanded payment of his due, Upon these allegations the Respondent was summoned to stand his trial u/s 420, Indian Penal Code.
3. The Respondent admitted to have issued the cheque and contended that though he knew that on the date of the issue of the cheque he had no sufficient deposit yet he issued the cheque as he expected some payment to him by the Small Scale Industries Corporation which he would have credited to the Bank to covet the cheque.
In course of the trial, the Appellant led evidence to show that on receipt of the cheque he had returned the original handnotes to the Respondent and contended that he was induced to do so by the issue of the cheque. This allegation was denied by the Respondent.
4. On a consideration of the evidence led by both the parties the learned Magistrate came to the following findings.
(1) The Appellant failed to prove that he was induced to deliver the handnotes on receipt of the cheque.
(2) The element of deception was wanting.
(3) The fact of making over the handnotes by the
Appellant to the Respondent was doubtful.
Upon these findings the Respondent was acquitted of the charge u/s 420. Indian Penal Code.
5. The appeal came up for hearing before our learned brother Panda, J. who by his order dated 4-11-1977, referred the same for disposal by a larger Bench. The relevant portion of the order of reference is extracted below:
The learned Magistrate acquitted the complainant relaying on decision of this Court reported in 1971(1) C. W. R. 930. What obsesses me is the single Judge decision of this Court. I am unfortunately not in agreement with the principle laid down In the above decision and relied on by the Magistrate. But since that is a single Judge decision of this Court, I am unable to brush it aside. In the interest of justice, it is desirable that the principle laid down therein be scrutinised by a larger Bench and the law settled for the guidance of the lower Courts. Let this matter be put up before the Hon''ble Chief Justice to constitute a larger Bench for testing the propriety of the principle decided in that case.
6. Under orders of the Hon''ble the Chief Justice the appeal has been placed before us for disposal.
7. The ingredients of the offence of cheating u/s 420, Indian Penal Code are that the person deceived delivered to someone a valuable security or property, that the person so deceived was induced to do so, that such person acted on such inducement in consequence of his having been deceived by the accused and that the accused acted fraudulently or dishonestly when so induced that person. There can be no cheating unless by reason of the deception the person deceived is induced to part with any property or to do or omit to do anything that he would not do or omit to do but for the deception.
8. In the present case there was no allegation in the complaint petition that the complainant delivered the handnotes which he would not have done if he had known that the cheque would be dishonoured. In his initial deposition the complainant did not also disclose that he had delivered the hand notes on being induced to do so by the issue of the cheque. Omission of this fact from the complaint petition and the initial deposition seriously affects the credibility of evidence given by the complainant in course of the trial. Save and except the sale uncorroborated testimony of the complainant there is no other evidence on the record to show that the complainant had delivered the handnotes to the accused. The accused who was examined as D.W. 2 denied having received the hand notes from the complainant. If actually the handnotes had been delivered, the complainant would not have omitted to mention such an important ''fact in his complaint petition and the initial deposition. The story introduced at the trial about delivery of the handnotes is clearly an afterthought. Thus the element of the person deceived delivering any property or valuable security to another person is lacking in this case.
9. The important question to be considered is whether the accused made any fraudulent representation in consequence of which delivery of any property or valuable security was made. There is absolutely no evidence that the accused made any representation that he had sufficient funds in his bank accounts to meet the cheque and that he issued the cheque in token of immediate full satisfaction of the dues of the complainant, it is just possible that the cheque was issued as a measure of accommodation to enable the accused to provide means for the honouring of the cheque within a convenient period of time after issue or to otherwise satisfy the dues of the complainant. In the absence of proof of any representation at the time on the part of the accused, which he knew or had reason to believe, to be false, there was no offence of cheating committed. On the facts proved, the element of fraud or dishonesty must be held to be absent in this case.
10. It was alleged in the complaint petition that the accused issued the cheque "with the dishonest motive of silencing the complainant when he demanded payment of his dues". It may be that the act of issuing the cheque by the accused induced the complainant not to seek immediate recovery of his dues by a civil suit. But there is no evidence that this has caused any damage or harm to the complainant.
11. The act of drawing a cheque implies three statements as to the state of affairs existing at the time when the cheque is drawn first, that the drawer has an account with the bank in question; secondly, that he has authority to draw on it for the amount shown on the cheque; and thirdly, that the cheque, as drawn, is a valid order for the payment of the amount, or that the present state of affairs is such that in the ordinary course of events, the cheque will, on future presentment, be honoured. It does not however, imply any representation that the drawer already has money in the bank to the amount shown on the cheque, for he may either have authority to overdraw, or have an honest intention of paying in the necessary money before the cheque can be presented-vide Kanwar Sain v. The Grown ILR (1938) Lah. 662.The learned single Judge who decided the case in Durjodhan Khuntia v. Ali Ahmed2, relied on the aforesaid principles. The Petitioner in that case delivered a cheque for Rs. 3,000/. to the complainant and took a sum of Rs. 3,000/- from him in cash. The cheque was not honoured by the Bank on the ground that the amount to the credit of the accused did not permit such encashment. There was nothing in the evidence of the complainant to show that the accused made any representation that he had sufficient cash to cover the cheque in his bank account. The learned single Judge held that the possibility of the accused having been under an honest impression that the amount to his credit might cover the cheque, and even otherwise, the possibility of his having honestly intended of paying in the necessary money before the cheque would be presented could not be excluded. On the findings that the requisite fraudulent or dishonest intention or the element of deception had not been established, it was held that the offence of cheating had not been made out. We are in respectful agreement with the view taken by the learned single Judge in that case.
12. In view of our above findings we are clearly of the opinion that the offence of cheating has not been made out. The order of acquittal is, therefore, justified.
13. There is no merit in this appeal and it is accordingly dismissed.
R.N. Misra, J.
14. I agree with the conclusion of my learned brother that the appeal be dismissed. As the correctness of the decision of a learned single Judge of this Court Durjodhan Khuntia v. Ali Ahmed 1971 (1) C.W.R. 930, was questioned and that brought this matter to be heard by a Division Bench, I think it appropriate to refer to certain aspects that arise for consideration.
15. Section 415 of the Indian Penal Code defines the offence of cheating thus:
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 the person in body, mind, reputation or property, is said to ''cheat''
It was pointed out in this Court in the case of Gobardhan Panda v. State 1970 (1) C.W.R. 59, that the following ingredients are necessary to constitute cheating:
(i) Deception by the accused,
(ii) (a) Fraudulently or dishonestly inducing that person
(i) to deliver any property to any person; or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing that person 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 came damage or harm to that person in body mind, reputation or property.
In the case before us it was necessary for the prosecution to prove that the Respondent had deceived the Appellant by fraudulently or dishonestly inducing him to deliver the promissory note by accepting the cheque and but for the deception, in consideration of receiving the cheque, the Appellant would not have parted with the promissory note and this parting of the promissory note had caused damage or harm to property of the Appellant. "Harm" as pointed out by the Supreme Court in the case of
...has not been defined in the Indian Penal Code: in its dictionary meaning it connotes hurt injury damage: impairment: moral wrong or evil. There is no warrant for the contention raised that the expression'' harm'' in Section 95 does not include physical injury. . The expression ''harm'' is used in many sections of the Indian Penal Code. In Sections 81, 87, 88. 89, 91, 92. 100, 104 and 106 the expression can only mean physical injury. In Section 93 it means an injurious mental reaction. In Section 415 it means injury to a person in body, mind, reputation or property....
My learned brother has rightly indicated that mere drawing up of a cheque for a specified amount even when the drawer knows that he does not have sufficient balance to his credit in his account to cover the amount for which the cheque is issued would not constitute any element for the offence. The view that prevailed with the learned Judges of the Lahore High Court in the case referred to in paragraph 11 of his judgment by my learned brother has also been accepted in the case of Bindeshwari Singh v. Shea Bachan Singh 1954 B.L.J.R. 77, where it was observed that if a person represent that he has money in bank to the amount of the cheque, he may not be acting dishonestly as he could very well have put into the bank sufficient amount to cover the cheque issued or he could have honestly believed that the bank would allow him an overdraft. Similar is the view of the Kerala High Court in the case of P.O. Cheriyan v. Kuruvilla 1968 Ker. L.T. 279, where it has been said that drawing up of a cheque does not mean that the drawer has enough money in the bank for he may have authority to overdraw or may have an honest intention of paying necessary balance to bank before the cheque is presented for encashment.
A Division Bench of the Bombay High Court in the case of Keshavji Madhavji v. Emperor AIR 1930 Bom. 179, referred to an earlier English decision and observed:
...There is an English case, however, The Queen v. Haselton, which is an old but a perfectly good authority for the proposition that the giving of a cheque on a bank as payment for goods, or in payment of a debt as here does not amount to a representation that the person giving the cheque has money to the amount in the bank at the time, but does amount to a representation (1) that he has authority to draw on the bank for that amount, (2) that the cheque is a good and valid order for the payment of its amount and that the cheque will be paid, i. e., that the existing state of facts is such that in the ordinary course the cheque will be met....)
It is not the Appellant''s case before us that the Respondent did not have any account with the bank or that he had no authority to draw upon the account. The cheque has been otherwise found to be a valid one and the only ground for dishonouring the cheque was that full .cover was not there. The Appellant seems to have heavily relied upon the fact that the cheque was dishonoured as proof of the offence of cheating. This is a feature which, however, would not help in establishing the offence unless the relevant ingredients are established. My learned brother has chosen to adopt the ratio in Durjodhan Khuntia''s case2and I entirely agree with him that the law as laid down there is correct.
Appeal dismissed.
