This article is written by Daisy Jain, from the Institute of Law, Nirma University. This is an exhaustive article that deals with the latest judgments of the Supreme Court on Section 420 IPC.
It has been published by Rachit Garg.
Table of Contents
Introduction
Section 415 of the Indian Penal Code (IPC) of 1860 defines the crime of cheating. Section 417 of the Code specifies the punishment for cheating. Despite this clause, harsher penalties for cheating were still necessary. Section 420 addresses this by punishing those who cheat and thereby dishonestly induce the person to deliver the property or any valuable security. To punish an act under Section 420, cheating must be proven. In other words, Section 420 particularly penalizes cases of cheating that are more severe. Under Section 417, cheating is illegal regardless of whether it is done dishonestly or fraudulently. In comparison, Section 420 deals with cases where cheating is done by dishonest inducement and the subject matter is of valuable security or property.
Rekha Jain v. The State of Karnataka and Ors. (2022)
Facts of the case
In this case, the complainant filed a complaint against Kamalesh Mulchand Jain, who is the husband of Rekha Jain, saying that the appellant’s husband stole more than 2 kg of gold jewelry from him by deception, enticement, and with intent to defraud. According to Section 420 of the Indian Penal Code, a complaint was filed for the offence. The investigation was conducted against the appellant Rekha Jain as well because she was running away and had the gold jewelry on her. When the appellant filed a petition with the High Court according to section 482 of the Cr.PC, the High Court declined to overturn the criminal charges/FIR filed against the appellant. Thus, the current appeal was filed. The writ petitioners who brought their case to the High Court have chosen to appeal the impugned decision and order by which the High Court dismissed the aforementioned criminal petition and declined to throw out the FIR/criminal proceedings against the petitioners.
Judgment of the case
Rekha Jain, the co-accused, is not even alleged to deceive by enticement and deliver the gold jewelry. Her husband, accused Kamalesh Mulchand Jain, is accused of fraudulent enticement and cheating. Therefore, it cannot be argued that Rekha Jain has committed any offence under Section 420 of the IPC for which she is currently charged, given the charges in the FIR as they are and the lack of any accusation of dishonest inducement by Rekha Jain. Because of this, the High Court made a serious mistake by refusing to halt the criminal case against Rekha Jain for the offence listed in Section 420 of the IPC. This is a situation where the High Court may have used its authority under Section 482 of the CrPC to stop the prosecution of Rekha Jain for the offence listed in Section 420 of the IPC. The criminal case brought against Rekha Jain, the appellant and accused, for the violation of Section 420 of the IPC, is now dismissed. The appeal was partly allowed.
Syed Yaseer Ibrahim v. State of U.P. (2022)
Facts of the case
In this case, on 2 January 2002, the appellant asserts ownership of the specific immovable property on the ground of a gift deed. On September 12, 2008, Azim Wasif filed a lawsuit against the appellant in an effort to get possession of the property under dispute and a declaration of ownership. In that lawsuit, the plaintiff has a will as the foundation for his claim. The First additional civil judge approved the application on September 19, 2009, and instructed the parties to the lawsuit to preserve the status quo regarding the contested property. The appellant is said to have signed a sale deed for the subject property on November 24, 2014, and it was completed on January 2, 2015. The FIR, as previously mentioned, was filed on February 5, 2020, by the second respondent, who claimed to be the holder of a Special Power of Attorney that Wasif, the person who had brought the declaratory action, had signed. Regarding the appellant, it is alleged that he committed an offence that is penalized under Section 420 of the IPC. Based on the facts listed previously, the appellant filed a petition with the High Court of Allahabad according to Section 482 of the CrPC. The petition was denied because there are disputed factual issues that cannot be resolved in procedures under Section 482 of the CrPC.
Judgment of the case
Accordingly, it was decided that, as the appellant is involved, no elements of the crime penalized under Section 420 of the IPC have been discovered to subsist. The charge sheet and the FIR make no mention of Section 420’s fundamental requirements. In light of this, continuing the case against the appellant would constitute an abuse of the legal system where a civil matter is being made to resemble a criminal offence. The appeal was granted and the contested judgment and order of the High Court of Allahabad dated 10 August 2021 were annulled on the aforementioned grounds. Subsequent to the charge sheet dated 12 February 2021, which was limited to the appellant alone, being quashed, the petition under Section 482 of the CrPC will be deemed to be successful.
Archana Rana v. State of Uttar Pradesh and Anr. (2021)
Facts of the case
In this case, the respondent filed an FIR under Sections 323, 419, 420, 504, and 506 Indian Penal Code, stating that the appellant’s husband had accepted money from him in the amount of Rs. 5,00,000 for the purpose of placing his son in a job. However, his son was unable to find employment, and when they went to the appellant’s home to request the money’s refund, the appellant physically beat the complainant and intimidated him to have him and his son unjustly charged with crimes. She also threw him and his son out of the house. The FIR and the criminal proceedings were challenged by the appellant under Section 482 of the Criminal Procedure Code in a petition, but the petition was denied by the court, leading to the appellant’s preference for the current appeal.
Judgment of the case
The Court held that committing cheating is an essential ingredient under Section 420 of the Indian Penal Code. According to the Court’s verdict, the following elements must be present for an offence to be classified as a Section 420 offence:
- Firstly, a person must cheat in violation of Section 415;
- Secondly, the aggrieved party must have been dishonestly persuaded to make, change, or destroy valuable security or anything that has been signed or sealed and can be turned into a valuable security. Therefore, cheating is a necessary component for an act to qualify as an offence under Section 420 IPC, and Section 415 defines cheating. The following criteria must be met in order for cheating to be considered a crime;
- Thirdly, a person must be duped in order to engage in illegal or fraudulent enticement. The induced individual should be purposefully persuaded to do something that he would not normally do or omit if he had not been deceived. Examples include persuading a person to deliver something to someone or giving permission for someone to keep something.
As a result, a dishonest or fraudulent inducement is a necessary component of the crime described in Section 415 IPC. A person is guilty of cheating if they dishonestly persuade someone to deliver something. The appellants brought criminal charges under Sections 419 and 420 of the Indian Penal Code were dismissed and set aside.
Sripati Singh (Since Deceased) through His Son Gaurav Singh v. State of Jharkhand and Anr. (2021)
Facts of the case
Sripati Singh (now deceased), through his son Mr. Gaurav Singh, challenged the Jharkhand High Court’s decision on December 17, 2019. The appellant and respondent no. 2, Hitesh K. Jain, were friendly acquaintances and family friends. For commercial purposes, the accused had addressed the appellant and requested financial support in the amount of INR 1 crore. The appellant provided a total of INR 2 crores between January 2014 and July 2014 on the promise of the accused that the money would be reimbursed in June or July 2015. Four agreements dated August 13, 2014, were signed in relation to the aforementioned transaction to acknowledge receipt of the loan. Furthermore, six checks totaling INR 2 crores were given to the appellant as payment for the aforementioned debt.
The accused promised in July 2015 that the money would be returned in October 2015. When the appellant produced the checks for realization on October 20, 2015, they were refused because there weren’t ‘sufficient monies’ in the accused’s bank account. Therefore, in accordance with Section 138 of the Negotiable Instrument Act, 1881, the appellant issued a legal notice dated November 21, 2015. The appellant claimed that the accused had defrauded him since he had accepted the money on the promise that it would be refunded, and as a result, a complaint was lodged under Section 420 of the Indian Penal Code, 1860 and Section 138 of the Act.
By the contested order, the Jharkhand High Court nullified two prior decisions made by the Judicial Magistrate First Class, Palamau:
(i) order dated July 4, 2016, in which the JMFC took cognizance of the offence and summoned the accused; and
(ii) order dated June 13, 2019, in which the Magistrate rejected the accused’s petition for discharge from the criminal complaint. As a result, the appellant appealed the impugned order to the SC.
Judgment of the case
The SC ruled that even while the facts and circumstances of the current case did not support a criminal complaint under Section 420 of the IPC, the complaint under Section 138 of the Act could still be maintained. The JHC’s contested order was overturned. As a result, the JMFC’s previously indicated orders were reinstated. The SC granted the appeal with the remark that all parties’ claims of merit were left unresolved, meaning that all claims and the defence would be taken into account over the course of the trial and that the trial court would autonomously reach its decision based on the facts presented to it.
Ketan Suresh Pawar and Anr. v. Yuvraj Sandeepan Sawant and Anr. (2019)
Facts of the case
In this case, Yogesh Ahir filed a complaint in 2014 alleging wrongdoing by Sunita Tupsundarya, Yuvraj Sawant Patil, Jitendra Gadia, and Ramesh Chavan. According to the complaint, the complainant was looking for a property to buy and found Jitendra Gadia, an estate agent who specialized in bank auction flats, as a result. The aforementioned estate agent had informed the plaintiff about the Special Quota Scheme, which allowed for the acquisition of the property without using the lottery method. After demonstrating his readiness, the complainant paid Vijaynath Pal Rs. 3 lakh and obtained a document from Jitendra Gadia granting him possession of the property. The complaint makes reference to the additional payments made in that respect to Jitendra Gadia and alleges that the offered fraudulent commitments were not kept. In that context, despite receiving checks from Sunita Tupe for Rs. 10 lakh and Rs. 15 lakh, the complainant was defrauded to the tune of Rs. 26.50 lakhs as a result of the dishonored cheques.
The co-accused of respondent no. 1 was arrested in connection with the complaint, and once the investigation was complete, a charge sheet was filed against them. However, the first respondent, in this case, was detained on December 18, 2018. Accordingly, defendant no. 1, in this case, submitted a bail application to the Sessions Court, which was denied by an order dated January 4, 2019. In this context, a petition asking for bail was submitted to the High Court. The High Court has approved the request made by respondent no. 1 to enlarge him on bail after taking into account the chronology of events, the nature of the alleged offence, and the fact that the other accused have been granted bail.
Judgment of the case
He had been convicted of the crime of aiding and abetting the murder of a witness in a case in which he was being tried, which was the context of the case being addressed and the bail was under cognizance. In light of the foregoing, this court came to the aforementioned result after taking all factors into account. It goes without saying that while a bail application is being considered, the facts of each case must be carefully considered while exercising the court’s authority, keeping in mind the guidelines for granting bail. In light of the foregoing, the High Court’s jurisdiction in the present instance cannot be said to have been misused for the reasons mentioned above. As a result, we do not see a need to intervene with the order from 13.02.2019 that is being contested here. The special leave petition is dismissed because it lacks merit.
C.B.I., New Delhi v. B.B. Agrawal and Ors. (2019)
Facts of the case
In this case, the Investigating Agency (CBI) discovered in 1992–1993 that two companies, M/s. New Beam Ferro Alloys Ltd. (NBFAL) and M/s. West Coast Brewers & Distillers Ltd., had issued a public offering of their companies, and during the public offering, these companies had allegedly deceived the Punjab National Bank (PNB), PNB House Branch, Sir P.M. Road, Fort, Mumbai, of roughly Rs. 15 crore The specifics of how the claimed embezzlement was carried out by the aforementioned two companies may not need to be explained.
The CBI inquiry resulted in the filing of a criminal complaint under Section 120B read with Sections 409, 420, 468, and 471 of the Indian Penal Code, 1860 against the managers of the firms and PNB officials. Six of the twelve defendants on the charge sheet are people, and the other eight are companies. In the contested ruling, the High Court granted the petitions and terminated the criminal proceedings, which prompted the CBI to file the current appeals in this Court with special permission.
Judgment of the case
The Hon’ble Supreme Court ruled that the prosecution may proceed with the criminal trial on the basis of the evidence presented against the accused who are still alive. In fact, it would be a violation of the law, as the High Court correctly held and we agree with. Following the arguments above, we conclude that these appeals are without merit. Therefore, the appeals were dismissed.
Mustafa v. State of Uttar Pradesh and Ors. (2019)
Facts of the case
In this case, a team from the police and excise departments filed an FIR in connection with the discovery of illegal alcohol and a country-made pistol with two live rounds. The District Magistrate, who was also the District Collector, gave the appellant a notice asking them to provide justification as to why the confiscated truck should not be forfeited. The appellant presented the District Magistrate with objections. The District Magistrate issued an order for the seizure and auction of automobiles in response to this show cause notice. A legal representative is chosen by the state government, the District Judge, heard the appellant’s appeal, which was later dismissed. Additionally, the High Court received no effective challenges to the aforementioned order.
Judgment of the case
The accused was convicted of a serious economic offence and was allegedly the protagonist of the crime, so bail was rejected, according to the Honorable Supreme Court. As a result, the order of the High Court was overturned, and the appeal was consequently granted, without any comment on the case’s ultimate merits.
Conclusion
Section 415, therefore, relates to cheating in general, and the punishment for the same has been given in Section 417. Section 420 is a severe type of offence entailing delivery of property by dishonestly eliciting a person or any modification or demolition to the whole or any portion of valuable security. The most vital feature of Section 420 is the pre-existence of malicious or deceptive intention in the accused’s mind, which has been described in Sections 24 and 25.
References
- https://www.livelaw.in/top-stories/supreme-court-cheating-case-dishonest-allegation-rekha-jain-vs-state-of-karnataka-2022-livelaw-sc-468-198825
- https://www.livelaw.in/pdf_upload/syed-yaseer-ibrahim-v-state-of-uttar-pradesh-anr-411277.pdf
- https://indiankanoon.org/doc/58624602/
- https://indiankanoon.org/doc/96505656/
- https://www.livelaw.in/pdf_upload/sripati-singh-d-vs-state-of-jharkhand-ll-2021-sc-606-403139.pdf
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