Supreme Court of India
A.M. MOHANversusTHE STATE REPRESENTED BY SHO AND ANOTHER
- Citation
- 2024 INSC 233
- Decided
- 20 March 2024
- Disposal
- Appeal(s) allowed
Holding
The Supreme Court held that, in the absence of dishonest inducement, the ingredients of Section 420 IPC are not made out against the appellant, and the High Court was justified in exercising its Section 482 jurisdiction to quash the FIR and charge‑sheet.
Summary
The appellant, A.M. Mohan, was charged under Section 420 read with Section 34 of the IPC along with co‑accused for alleged cheating. He filed a petition under Section 482 of the CrPC seeking quashment of the FIR, arguing that the FIR and charge‑sheet did not disclose the essential ingredient of dishonest inducement required for an offence under Section 420. The Supreme Court examined the ingredients of Sections 415 and 420, noting that the FIR only alleged inducement against co‑accused No. 1 and No. 2, and that no fraudulent inducement by the appellant was shown. The Court held that the absence of dishonest inducement meant the provisions of Section 420 could not attach to the appellant, and continuing the prosecution would amount to abuse of process. It also clarified that Section 482 jurisdiction is not limited to the FIR stage and can be exercised even after a charge‑sheet is filed. Consequently, the Court quashed the FIR and the charge‑sheet against the appellant and allowed the appeal.
Issues considered
- The FIR and charge‑sheet disclose a prima facie case of cheating under Section 420 IPC against the appellant.
- Whether the absence of dishonest inducement negates the applicability of Section 420 IPC to the appellant.
- Whether the High Court could exercise its inherent powers under Section 482 CrPC to quash proceedings after a charge‑sheet has been filed.
Legislation cited
- Code of Criminal Procedure, 1973s. 482
- Indian Penal Code, 1860s. 34, s. 415, s. 420
Subjects
QuashingCheatingDeceptionDishonest intentionDishonest inducementAbuse of process of lawMiscarriage of justice
Judgment
[2024] 3 S.C.R. 722 : 2024 INSC 233
A.M. Mohan
v.
The State Represented by SHO and Another
(Criminal Appeal No. 1716 of 2024)
20 March 2024
[B.R. Gavai,* Rajesh Bindal and Sandeep Mehta, JJ.]
Issue for Consideration
FIR registered against accused Nos.1, 2 and 3 (appellant) for
offences punishable u/s.420 r/w s.34, Penal Code, 1860. High
Court whether justified in rejecting the petition filed by the appellant
u/s.482, Code of Criminal Procedure, 1973. Section 420, IPC, if
attracted qua the appellant.
Headnotes
Penal Code, 1860 – s.420 – Ingredients – s.420 when not
attracted:
Held: For attracting the provision of s.420, IPC, the FIR/complaint
must show that the ingredients of s.415, IPC are made out – 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 accused at the time of making the inducement – In the
present case, no role of inducement at all has been attributed
to the appellant – Allegations w.r.t inducement are only against
accused Nos.1 and 2 – Rather, from the perusal of the FIR and
the charge-sheet, it would reveal that there was no transaction of
any nature directly between the appellant and the complainant –
FIR or the charge-sheet, even if taken at its face value, does not
disclose the ingredients to attract the provision of s.420, IPC qua
the appellant – Dishonest inducement is the sine qua non to attract
the provisions of ss.415 and 420 of IPC and the same is totally
lacking qua the appellant – In that view of the matter, continuation
of the criminal proceedings against the appellant would be nothing
else but amount to abuse of process of law resulting in miscarriage
of justice – Impugned orders and the FIR alongwith the charge-
sheet filed against the appellant, quashed and set aside. [Paras
13, 15, 19, 20 and 24]
* Author
[2024] 3 S.C.R. 723
A.M. Mohan v. The State Represented by SHO and Another
Code of Criminal Procedure, 1973 – s.482 – Exercise of
jurisdiction under – Discussed.
Code of Criminal Procedure, 1973 – s.482 – FIR registered
against appellant u/s.420 r/w s.34, Penal Code, 1860 – High
Court rejected the petition filed by the appellant u/s.482 –
Present appeal filed – Contention of the respondents that
since the charge-sheet has been filed, the present appeal is
liable to be dismissed:
Held: Said contention has no merit – As rightly held in Anand
Kumar Mohatta and Another v. State (NCT of Delhi), Department
of Home and Another, [2018] 13 SCR 1028, there is nothing
in the words of this section which restricts the exercise of the
power of the Court to prevent the abuse of process of court or
miscarriage of justice only to the stage of the FIR – High Court
can exercise jurisdiction u/s.482 CrPC even when the discharge
application is pending with the trial court – Indeed, it would be a
travesty to hold that proceedings initiated against a person can
be interfered with at the stage of FIR but not if it has advanced
and the allegations have materialised into a charge-sheet – On
the contrary it could be said that the abuse of process caused
by FIR stands aggravated if the FIR has taken the form of a
charge-sheet after investigation – The power is undoubtedly
conferred to prevent abuse of process of power of any court.
[Paras 21, 23]
Case Law Cited
Prof. R.K. Vijayasarathy and Another v. Sudha
Seetharam and Another [2019] 2 SCR 185 : (2019)
16 SCC 739; Anand Kumar Mohatta and Another v.
State (NCT of Delhi), Department of Home and Another
[2018] 13 SCR 1028 : (2019) 11 SCC 706; Haji Iqbal
alias Bala through S.P.O.A. v. State of U.P. and Others
(2023) SCC OnLine SC 946 – relied on.
Indian Oil Corporation v. NEPC India Limited and Others
[2006] Suppl. 3 SCR 704 : (2006) 6 SCC 736; G. Sagar
Suri and Another v. State of U.P. and Others [2000] 1
SCR 417 : (2000) 2 SCC 636; Archana Rana v. State of
Uttar Pradesh and Another (2021) 3 SCC 751; Deepak
Gaba and Others v. State of Uttar Pradesh and Another
724 [2024] 3 S.C.R.
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(2023) 3 SCC 423; Mariam Fasihuddin and Another v.
State by Adugodi Police Station and Another [2024] 1
SCR 623 : (2024) SCC OnLine SC 58 – referred to.
List of Acts
Code of Criminal Procedure, 1973; Penal Code, 1860.
List of Keywords
Quashing; Cheating; Deception; Dishonest intention; Dishonest
inducement; Abuse of process of law; Miscarriage of justice.
Case Arising From
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.1716
of 2024
From the Judgment and Order dated 15.07.2022 of the High Court
of Judicature at Madras in CRLOP No.20716 of 2020
Appearances for Parties
S. Nagamuthu, Sr. Adv., S. Hariharan, S. Sathiaseelan, Amaan
Shreyas, Ms. Mannat Tipnis, Anshul Syal, Ms. Bhavana Duhoon,
Advs. for the Appellant.
V. Krishnamurthy, Sr. A.A.G., D. Kumanan, Sheikh F. Kalia, Mrs.
Deepa. S, G. Ananda Selvam, Ms. Lakshmi Ramamurthy, Advs. for
the Respondents.
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, J.
1. Leave granted.
2. The present appeal challenges the order dated 15th July 2022 passed
by the learned Single Judge of the High Court of Judicature at Madras
in Criminal O.P. No. 20716 of 2020 and Crl. M.P. No. 8763 of 2020,
whereby the High Court rejected the petition filed by the present
appellant under Section 482 of the Code of Criminal Procedure,
1973 (“Cr.P.C.” for short), to call for the records and to quash the
First Information Report (“FIR” for short) registered as Crime No. 21
of 2020, on the file of SHO, District Crime Branch, Kancheepuram,
[2024] 3 S.C.R. 725
A.M. Mohan v. The State Represented by SHO and Another
in connection with the offence punishable under Section 420 read
with 34 of the Indian Penal Code, 1860 (“IPC” for short).
FACTS
3. Shorn of details, the facts leading to the present appeal are as under:
3.1 The case of the prosecution is that, during the year 2016,
accused No. 2-Suresh Prathaban, being a college friend,
approached the complainant Karthick Krishnamurthy for
some help to clear his hand loan. The accused No. 2 further
told that he had business with accused No. 1-Lakshmanan,
who is running a hotel and also doing real estate business.
Upon the insistence of accused No. 2, the complainant had
agreed to extend financial help to accused No. 1 to the tune
of Rs.1,60,00,000/- for the business project(s) at Oragadam
and around Kancheepuram District with condition to repay the
same within 20 months with 100% profit.
3.2 Accordingly, the complainant transferred a sum of Rs.49,25,000/-
on 18 th March 2016, Rs.20,01,000/- on 31 st May 2016,
Rs.36,25,000/- on 13th June 2016, Rs.30,24,166/- on 8th July
2016 through RTGS and Rs. 24,25,834/- in cash to accused
Nos. 1 and 2, totalling to the tune of Rs.1,60,01,000/- (though
mentioned in complaint as Rs.1,60,00,000/-). To secure the
same, accused No. 1 had executed a registered simple mortgage
deed dated 18th March 2016 in favour of the complainant relating
to 100 plots at Sumangali Village, Thiruvannamalai District,
registered vide document No.768 of 2016 for Rs.1,00,00,000/-.
3.3 Thereafter, at the insistence of accused Nos. 1 and 2, the
complainant entered into an unregistered memorandum of
understanding and paid a sum of Rs.1,50,00,000/- and a further
sum of Rs.50,00,000/- by RTGS and cheque to accused No. 1’s
bank. In the said amount, the complainant directly transferred
a sum of Rs.20,00,000/- in favour of the present appellant-
A.M. Mohan (accused No.3). Further, accused No.1 also
transferred a sum of Rs.1,80,00,000/- to the present appellant
for the purchase of the land admeasuring 9.80 acres situated
at Chittoor Village, Sriperumbudur Taluk. To secure the said
payment of Rs.2,00,00,000/- with returns of Rs.10,00,00,000/-,
accused No. 1 executed a registered deed of General Power of
726 [2024] 3 S.C.R.
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Attorney (“GPA” for short) dated 3rd February 2017, in favour of
the complainant, vide document No. 3733/2017, in respect of
the above said land and also executed a registered sale deed
relating to the land admeasuring 2.52 acres situated at Vellarai
Village, Kancheepuram District vide document No.386/2017
dated 9th February 2017 in favour of the complainant.
3.4 The accused No. 1 also executed a mortgage deed for land
admeasuring 2.14 acres at Sunguvarchatram Village (though
mentioned in the complaint as ‘a registered Agreement to Sell
land admeasuring 1.64½ acres’) in favour of the complainant
registered vide document No.373/2017 dated 27th February
2017. Thereafter, accused Nos. 1 and 2 had received an amount
of Rs.49,85,500/- and executed unregistered loan agreement
dated 5th March 2017, in favour of the complainant and agreed
to repay with interest quantified at Rs.60,000/- per month. For
repayment of the said amount along with interest, accused No.
1 had given a cheque for Rs.58,50,000/- and the same was
returned dishonoured due to insufficient funds.
3.5 Apart from all these transactions, on insistence of accused
Nos. 1 and 2, the complainant joined in the “gold chit business”
conducted by accused No. 1 and paid a sum of Rs.1,20,000/-
per month, from March 2016 to August 2017, totalling to the
tune of Rs.21,60,000/-. The accused persons swindled all the
amounts and cheated the complainant. The accused No. 1
had disposed of about 58 plots on his own and failed to return
the mortgaged amount of Rs.1,00,00,000/- with interest. He
also cancelled the power of attorney standing in favour of the
complainant relating to 9.80 acres of land at Chittoor Village and
without notice to the complainant, he sold out the same to third
parties. Accordingly, the appellant and other accused persons
cheated the complainant to the tune of Rs.16,01,00,000/- (though
mentioned in complaint as Rs.16,06,00,000/-) by their willful
and intentional action of fraud, cheating and criminal breach
of trust. Hence the complaint.
3.6 On the strength of the complaint filed before the Judicial
Magistrate, a FIR being Crime No. 21 of 2020 came to be
registered on 7th November 2020, at District Crime Branch,
Kancheepuram District, against accused Nos. 1, 2 and 3, for
[2024] 3 S.C.R. 727
A.M. Mohan v. The State Represented by SHO and Another
the offences punishable under Section 420 read with 34 of
the IPC.
3.7 Aggrieved thereby, the appellant herein filed a Criminal O.P.
No. 20716 of 2020 before the High Court, under Section 482
of the Cr.P.C., to call for the records and to quash the said FIR.
3.8 Vide impugned order dated 15th July 2022, the learned Single
Judge of the High Court, observed that it is clear that the
intention of the appellant and other accused persons was only
to cheat the complainant and that it can be seen from the FIR
that there are specific allegations against the appellant to attract
the offence, which has to be investigated in depth.
3.9 The Single Judge held that the FIR discloses prima facie
commission of a cognizable offence and as such, the High
Court cannot interfere with the investigation. As a result, the
High Court rejected the petition under Section 482 of Cr.P.C.
for quashing of the FIR, but directed the investigating agency
to complete the investigation and file a final report within a
period of twelve weeks.
3.10 Aggrieved thereby, the appellant filed the present appeal, in
which notice came to be issued vide order dated 21st October
2022.
3.11 As per the additional documents filed in this Court, the charge-
sheet in relation to the subject FIR, came to be filed on 4th
January 2023.
4. We have heard Shri S. Nagamuthu, learned Senior Counsel appearing
for the appellant, Shri V. Krishnamurthy, learned Senior Additional
Advocate General (AAG) for respondent No. 1 and Shri G. Ananda
Selvam, learned counsel appearing for respondent No. 2.
SUBMISSIONS
5. Shri Nagamuthu, learned Senior Counsel appearing on behalf of
the appellant submits that even if the averments made in the FIR
are taken at their face value, no case is made out for the offence
punishable under Section 420 of IPC against the present appellant.
It is further submitted that a reading of the charge-sheet would reveal
that none of the ingredients to attract the provision of Section 420
of IPC could be found therein.
728 [2024] 3 S.C.R.
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6. Shri Nagamuthu, relying on various judgments of this Court, submits
that, for attracting the offence of ‘cheating’ as defined under Section
415 of IPC and punishable under Section 420 of IPC, it is necessary
that the FIR should make out a case of “intentional inducement”,
“dishonesty” or “fraudulence”. It is submitted that for the offence of
‘cheating’, there should not only be cheating, but as a consequence
of such cheating, the accused should also have dishonestly induced
the person deceived to deliver any property to a person. It is submitted
that neither the FIR nor the charge-sheet contain a whisper with
respect to any inducement, fraud or dishonesty qua the appellant
that caused the complainant to deliver the sum of Rs.20,00,000/- to
his bank account on 2nd February 2017.
7. Shri Nagamuthu further submitted that the complainant has
deliberately suppressed the fact that the appellant had transferred
the land in favour of accused No. 1 by way of a Sale Deed dated
3rd February 2017 i.e., on the very next day of receiving the sum
of Rs.20,00,000/- from the complainant. It is further submitted that,
on the very same day i.e. 3rd February 2017, accused No. 1 had
executed a GPA in favour of the complainant vide Document No.
3733 of 2017. The GPA specifically states that the complainant had
received the GPA in respect of the land purchased by accused No. 1
from the appellant. It is therefore submitted that the appellant has no
role to play after 3rd February 2017 and almost all the allegations are
with regard to cancellation of GPA etc., and execution of subsequent
sale deed in favour of accused No. 4-Seeralan and accused No.
5-Kavitha by accused No. 1, are not related to the appellant.
8. As against this, Shri G. Ananda Selvam, learned counsel appearing
for respondent No. 2 submits that since the charge-sheet has already
been filed, the appeal is rendered infructuous. It is submitted that the
appellant can very well file an application for discharge. It is further
submitted that the averments in the FIR would clearly show that the
present appellant along with other accused persons has cheated
the complainant and defrauded with the huge amount. It is therefore
submitted that no interference is warranted in the present appeal.
CONSIDERATION
9. The law with regard to exercise of jurisdiction under Section 482
of Cr.P.C. to quash complaints and criminal proceedings has been
succinctly summarized by this Court in the case of Indian Oil
[2024] 3 S.C.R. 729
A.M. Mohan v. The State Represented by SHO and Another
Corporation v. NEPC India Limited and Others1 after considering
the earlier precedents. It will be apposite to refer to the following
observations of this Court in the said case, which read thus:
“12. The principles relating to exercise of jurisdiction under
Section 482 of the Code of Criminal Procedure to quash
complaints and criminal proceedings have been stated and
reiterated by this Court in several decisions. To mention
a few—Madhavrao Jiwajirao Scindia v. Sambhajirao
Chandrojirao Angre [(1988) 1 SCC 692 : 1988 SCC (Cri)
234], State of Haryana v. Bhajan Lal [1992 Supp (1) SCC
335 : 1992 SCC (Cri) 426], Rupan Deol Bajaj v. Kanwar
Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC (Cri) 1059],
Central Bureau of Investigation v. Duncans Agro Industries
Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045], State of
Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996
SCC (Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999)
3 SCC 259 : 1999 SCC (Cri) 401], Medchl Chemicals &
Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 :
2000 SCC (Cri) 615], Hridaya Ranjan Prasad Verma v.
State of Bihar [(2000) 4 SCC 168 : 2000 SCC (Cri) 786],
M. Krishnan v. Vijay Singh [(2001) 8 SCC 645 : 2002 SCC
(Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd.
Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283].
The principles, relevant to our purpose are:
(i) A complaint can be quashed where the
allegations made in 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 the case alleged against
the accused.
For this purpose, the complaint has to be
examined as a whole, but without examining
the merits of the allegations. Neither a detailed
inquiry nor a meticulous analysis of the
material nor an assessment of the reliability or
genuineness of the allegations in the complaint,
1 [2006] Suppl. 3 SCR 704 : (2006) 6 SCC 736 : 2006 INSC 452
730 [2024] 3 S.C.R.
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is warranted while examining prayer for quashing
of a complaint.
(ii) A complaint may also be quashed where it
is a clear abuse of the process of the court,
as when the criminal proceeding is found to
have been initiated with mala fides/malice
for wreaking vengeance or to cause harm, or
where the allegations are absurd and inherently
improbable.
(iii) The power to quash shall not, however, be
used to stifle or scuttle a legitimate prosecution.
The power should be used sparingly and with
abundant caution.
(iv) The complaint is not required to verbatim
reproduce the legal ingredients of the offence
alleged. If the necessary factual foundation is
laid in the complaint, merely on the ground
that a few ingredients have not been stated in
detail, the proceedings should not be quashed.
Quashing of the complaint is warranted only
where the complaint is so bereft of even the
basic facts which are absolutely necessary for
making out the offence.
(v) A given set of facts may make out: (a) purely a
civil wrong; or (b) purely a criminal offence; or
(c) a civil wrong as also a criminal offence. A
commercial transaction or a contractual dispute,
apart from furnishing a cause of action for
seeking remedy in civil law, may also involve
a criminal offence. As the nature and scope of
a civil proceeding are different from a criminal
proceeding, the mere fact that the complaint
relates to a commercial transaction or breach
of contract, for which a civil remedy is available
or has been availed, is not by itself a ground
to quash the criminal proceedings. The test is
whether the allegations in the complaint disclose
a criminal offence or not.
[2024] 3 S.C.R. 731
A.M. Mohan v. The State Represented by SHO and Another
13. While on this issue, it is necessary to take notice of a
growing tendency in business circles to convert purely civil
disputes into criminal cases. This is obviously on account
of a prevalent impression that civil law remedies are time
consuming and do not adequately protect the interests
of lenders/creditors. Such a tendency is seen in several
family disputes also, leading to irretrievable breakdown
of marriages/families. There is also an impression that
if a person could somehow be entangled in a criminal
prosecution, there is a likelihood of imminent settlement.
Any effort to settle civil disputes and claims, which do
not involve any criminal offence, by applying pressure
through criminal prosecution should be deprecated and
discouraged. In G. Sagar Suri v. State of U.P. [(2000) 2
SCC 636 : 2000 SCC (Cri) 513] this Court observed: (SCC
p. 643, para 8)
“It is to be seen if a matter, which is essentially
of a civil nature, has been given a cloak of
criminal offence. Criminal proceedings are not
a short cut of other remedies available in law.
Before issuing process a criminal court has
to exercise a great deal of caution. For the
accused it is a serious matter. This Court has
laid certain principles on the basis of which the
High Court is to exercise its jurisdiction under
Section 482 of the Code. Jurisdiction under this
section has to be exercised to prevent abuse of
the process of any court or otherwise to secure
the ends of justice.”
14. While no one with a legitimate cause or grievance
should be prevented from seeking remedies available
in criminal law, a complainant who initiates or persists
with a prosecution, being fully aware that the criminal
proceedings are unwarranted and his remedy lies only
in civil law, should himself be made accountable, at
the end of such misconceived criminal proceedings,
in accordance with law. One positive step that can be
taken by the courts, to curb unnecessary prosecutions
and harassment of innocent parties, is to exercise their
732 [2024] 3 S.C.R.
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power under Section 250 CrPC more frequently, where
they discern malice or frivolousness or ulterior motives
on the part of the complainant. Be that as it may.”
10. The Court has also noted the concern with regard to a growing
tendency in business circles to convert purely civil disputes into
criminal cases. The Court observed that this is obviously on
account of a prevalent impression that civil law remedies are time
consuming and do not adequately protect the interests of lenders/
creditors. The Court also recorded that there is an impression that
if a person could somehow be entangled in a criminal prosecution,
there is a likelihood of imminent settlement. The Court, relying on
the law laid down by it in the case of G. Sagar Suri and Another v.
State of U.P. and Others2 held that any effort to settle civil disputes
and claims, which do not involve any criminal offence, by applying
pressure through criminal prosecution should be deprecated and
discouraged. The Court also observed that though no one with a
legitimate cause or grievance should be prevented from seeking
remedies available in criminal law, a complainant who initiates
or persists with a prosecution, being fully aware that the criminal
proceedings are unwarranted and his remedy lies only in civil law,
should himself be made accountable, at the end of such misconceived
criminal proceedings, in accordance with law.
11. This Court, in the case of Prof. R.K. Vijayasarathy and Another v.
Sudha Seetharam and Another3 has culled out the ingredients to
constitute the offence under Sections 415 and 420 of IPC, as under:
“15. Section 415 of the Penal Code reads thus:
“415. Cheating.—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
2 [2000] 1 SCR 417 : (2000) 2 SCC 636 : 2000 INSC 34
3 [2019] 2 SCR 185 : (2019) 16 SCC 739 : 2019 INSC 216
[2024] 3 S.C.R. 733
A.M. Mohan v. The State Represented by SHO and Another
or is likely to cause damage or harm to that
person in body, mind, reputation or property, is
said to “cheat”.”
16. The ingredients to constitute an offence of cheating
are as follows:
16.1. There should be fraudulent or dishonest inducement
of a person by deceiving him:
16.1.1. The person so induced should be intentionally
induced to deliver any property to any person or to consent
that any person shall retain any property, or
16.1.2. The person so induced should be intentionally
induced to do or to omit to do anything which he would
not do or omit if he were not so deceived; and
16.2. In cases covered by 16.1.2. above, the act or omission
should be one which caused or is likely to cause damage
or harm to the person induced in body, mind, reputation
or property.
17. A fraudulent or dishonest inducement is an essential
ingredient of the offence. A person who dishonestly induces
another person to deliver any property is liable for the
offence of cheating.
18. Section 420 of the Penal Code reads thus:
“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.”
19. The ingredients to constitute an offence under Section
420 are as follows:
734 [2024] 3 S.C.R.
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19.1. A person must commit the offence of cheating under
Section 415; and
19.2. The person cheated must be dishonestly induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed
or sealed and capable of being converted into valuable
security.
20. Cheating is an essential ingredient for an act to
constitute an offence under Section 420.”
12. A similar view has been taken by this Court in the cases of Archana
Rana v. State of Uttar Pradesh and Another4, Deepak Gaba
and Others v. State of Uttar Pradesh and Another5 and Mariam
Fasihuddin and Another v. State by Adugodi Police Station and
Another6.
13. It could thus be seen that 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. In other words,
for attracting the provisions of Section 420 of IPC, it must be shown
that the FIR/complaint discloses:
(i) the deception of any person;
(ii) fraudulently or dishonestly inducing that person to deliver any
property to any person; and
(iii) dishonest intention of the accused at the time of making the
inducement.
14. The averments with regard to the present appellant as have been
found in the FIR is as under:
4 (2021) 3 SCC 751 : 2021 INSC 135
5 (2023) 3 SCC 423 : 2023 INSC 1
6 [2024] 1 SCR 623 : 2024 SCC OnLine SC 58 : 2024 INSC 49
[2024] 3 S.C.R. 735
A.M. Mohan v. The State Represented by SHO and Another
“At the instance of the said Lakshmanan (accused
No.1), I (complainant) paid directly Rs. 20,00,000/- to
one Mohan (appellant-accused No. 3) and the said
Lakshmanan (accused No.1) transferred the remaining
sale consideration of over 18 odd crores to Mohan for
the purchase of his lands at Sunguvarchatram. But
suppressed the execution of sale deed dated 03.02.2017
by the appellant/accused No.3.”
15. A perusal thereof would reveal that even in the said averments, the
allegation with regard to inducement is only qua accused No. 1.
We have perused the entire FIR. Except the aforesaid allegations,
there are no other allegation with regard to the present appellant-
accused No. 3. The rest of the allegations are against accused No.
1 (Lakshmanan). Even the allegations with regard to inducement
are only against accused Nos. 1 and 2.
16. Not only that, even in the charge-sheet, the only role attributed to
the present appellant could be found as follows:
“Thereafter, A2 had lured the complainant once again
saying that A1 is going to layout the 9.80 acre land in
Chittoor Village, Thiruperumbudur Taluk, which is under
A3’s general power of attorney and that the complainant
would gain huge profits if he invests Rs. 2 crores in this
project as well. A1 too, as he had already done, lured
the complainant that he would pay him a share out of the
profit, and executed a General Power of Attorney Deed
in favour of the complainant in respect of the 9.80 acre
land in Chittoor Village in Thiruperumbudur Taluk which he
purchased from A3 and registered it as Doc. No. 3733/2017
in Sunguvarchattiram Sub Registrar Office on 03.02.2017,
in a manner instilling confidence in the complainant.
……..
Moreover, upon instructions from A1 to transfer Rs.
20,00,000/- to A3’s Tamil Nadu Mercantile Bank Account
towards sale of the land made by A3 to A1, the complainant
had transferred online a sum of Rs.20,00,000/- to A3’s
Tamil Nadu Mercantile Bank Account from his Yes Bank
Account on 02.02.2017.”
736 [2024] 3 S.C.R.
Digital Supreme Court Reports
17. It could thus be seen that the only allegation against the present
appellant is that accused No. 1 executed the GPA in favour of the
complainant in respect of the land which is purchased from the
present appellant-accused No.3. The other allegation is that upon
instructions of accused No. 1 to transfer Rs. 20,00,000/- to accused
No. 3’s Tamil Nadu Mercantile Bank Account towards sale of the
land made by the appellant-accused No.3 to accused No.1, the
complainant had transferred online a sum of Rs.20,00,000/-.
18. It is an undisputed position that upon receipt of the said amount of
Rs.20,00,000/-, the present appellant had transferred the land in
question by sale deed in favour of accused No.1. It is also undisputed
that thereafter accused No. 1 executed the GPA in favour of the
complainant on the same day. After the sale deed was executed in
favour of accused No.1 by the appellant-accused No.3, though the
complaint narrates various instances thereafter, no role is attributed
to the present appellant.
19. At the cost of repetition, it has to be noted that no role of inducement
at all has been attributed to the present appellant. Rather, from the
perusal of the FIR and the charge-sheet, it would reveal that there was
no transaction of any nature directly between the appellant and the
complainant. The version, if accepted at its face value, would reveal
that, at the instance of accused No. 1, the complainant transferred
the amount of Rs.20,00,000/- in the account of the appellant. On
receipt of the said amount, the appellant immediately executed the
sale deed in favour of accused No.1, who thereafter executed the
GPA in favour of the complainant. After that, no role is attributed
to the present appellant and whatever happened thereafter, has
happened between accused No. 1, the complainant and the other
accused persons. In that view of the matter, we find that the FIR or
the charge-sheet, even if taken at its face value, does not disclose
the ingredients to attract the provision of Section 420 of IPC qua
the appellant.
20. The dishonest inducement is the sine qua non to attract the provisions
of Sections 415 and 420 of IPC. In our considered view, the same is
totally lacking qua the present appellant. In that view of the matter,
we find that continuation of the criminal proceedings against the
present appellant would be nothing else but amount to abuse of
process of law resulting in miscarriage of justice.
[2024] 3 S.C.R. 737
A.M. Mohan v. The State Represented by SHO and Another
21. Insofar as the contention of the respondents that since the charge-
sheet has been filed, the present appeal is liable to be dismissed,
is concerned, it will be relevant to refer to the following observations
of this Court, in the case of Anand Kumar Mohatta and Another v.
State (NCT of Delhi), Department of Home and Another7:
“14. First, we would like to deal with the submission of
the learned Senior Counsel for Respondent 2 that once
the charge-sheet is filed, petition for quashing of FIR is
untenable. We do not see any merit in this submission,
keeping in mind the position of this Court in Joseph
Salvaraj A. v. State of Gujarat [Joseph Salvaraj A. v.
State of Gujarat, (2011) 7 SCC 59 : (2011) 3 SCC (Cri)
23] . In Joseph Salvaraj A. [Joseph Salvaraj A. v. State of
Gujarat, (2011) 7 SCC 59 : (2011) 3 SCC (Cri) 23] , this
Court while deciding the question whether the High Court
could entertain the Section 482 petition for quashing of
FIR, when the charge-sheet was filed by the police during
the pendency of the Section 482 petition, observed : (SCC
p. 63, para 16)
“16. Thus, from the general conspectus of the
various sections under which the appellant is
being charged and is to be prosecuted would
show that the same are not made out even
prima facie from the complainant’s FIR. Even
if the charge-sheet had been filed, the learned
Single Judge [Joesph Saivaraj A. v. State of
Gujarat, 2007 SCC OnLine Guj 365] could have
still examined whether the offences alleged to
have been committed by the appellant were
prima facie made out from the complainant’s
FIR, charge-sheet, documents, etc. or not.”
15. Even otherwise it must be remembered that the
provision invoked by the accused before the High Court
is Section 482 CrPC and that this Court is hearing an
appeal from an order under Section 482 CrPC. Section
482 CrPC reads as follows:
7 [2018] 13 SCR 1028 : (2019) 11 SCC 706 : 2018 INSC 1060
738 [2024] 3 S.C.R.
Digital Supreme Court Reports
“482. Saving of inherent powers of the High
Court.—Nothing in this Code shall be deemed
to limit or affect the inherent powers of the High
Court to make such orders as may be necessary
to give effect to any order under this Code, or
to prevent abuse of the process of any court or
otherwise to secure the ends of justice.”
16. There is nothing in the words of this section which
restricts the exercise of the power of the Court to
prevent the abuse of process of court or miscarriage
of justice only to the stage of the FIR. It is settled
principle of law that the High Court can exercise
jurisdiction under Section 482 CrPC even when the
discharge application is pending with the trial court
[G. Sagar Suri v. State of U.P., (2000) 2 SCC 636, para 7 :
2000 SCC (Cri) 513. Umesh Kumar v. State of A.P., (2013)
10 SCC 591, para 20 : (2014) 1 SCC (Cri) 338 : (2014)
2 SCC (L&S) 237] . Indeed, it would be a travesty to
hold that proceedings initiated against a person can
be interfered with at the stage of FIR but not if it has
advanced and the allegations have materialised into a
charge-sheet. On the contrary it could be said that the
abuse of process caused by FIR stands aggravated
if the FIR has taken the form of a charge-sheet after
investigation. The power is undoubtedly conferred
to prevent abuse of process of power of any court.”
[emphasis supplied]
22. A similar view has been taken by this Court in the case of Haji Iqbal
alias Bala through S.P.O.A. v. State of U.P. and Others8.
23. In that view of the matter, contention in this regard has no merit.
CONCLUSION
24. In the result, we are inclined to allow the appeal. The order of the
High Court dated 15th July 2022 in Criminal O.P. No.20716 of 2020
and Criminal M.P. No. 8763 of 2020 is quashed and set aside. The
8 2023 SCC OnLine SC 946 : 2023 INSC 688
[2024] 3 S.C.R. 739
A.M. Mohan v. The State Represented by SHO and Another
FIR in Crime No.21 of 2020 and the consequential charge-sheet filed
against the present appellant shall stand quashed and set aside.
25. Pending application(s), if any, shall stand disposed of.
Headnotes prepared by: Divya Pandey Result of the case:
Appeal allowed.
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