a book on criminal breach of trust, cheating and cheque dishonor litigation by nayeem firoz(a judge...

Laws on cheque dishonor litigation, Criminal breach of trust & cheating (SS.406/420 PC)

[concept • jurisprudence • case-law references]

MOHAMMAD NAYEEM FIROZ

Sr. Judicial Magistrate, Mymensingh

Member, Bangladesh Judicial Service

|C | U | L | T|

(centre for unequivocal legal thinking)

Laws on Cheque Dishonor Litigation,

Criminal Breach of Trust & Cheating(SS.406/420 PC)

Author Mohammad Nayeem Firoz

Publisher

Shams Publications 4, Islamia market, Nilkhet, Dhaka

Manufactured at

CULT(Centre for Unequivocal Legal Thinking)

First Published in December 2009

Second Edition in January 2013

Copyright

The Publisher

Cover Concept

The Author

Price

BDT. 250

US $ 5

ISBN

978-984-8792-41-4

Dedicated to

‘s i s t e r N a j m a’

whom we lost in the grimy waters but

reflection of whose memories are still bright in our tears !

Preface

To be straightforward, this book is nothing but an endeavor to unlock the critical legal issues

in criminal cases involving the allegations of the offences of Criminal Breach of Trust and/or

Cheating. The Penal Code, 1860 as one of the cardinal substantive criminal law in the

criminal justice system of Bangladesh has created inter alia the offences of Criminal Breach

of Trust and Cheating. The Code has also prescribed the quantum of punishments for the

overt act or covert act committed in the commission of such offences. Like the Classical

Roman Law’s ‘Twelve Table’ I have incorporated in this book 12 Chapters to unleash

chronologically the quantum of knowledge what I perceived about the jurisprudence of

SS.406/420 litigations through my ‘jurisprudential voyage’ into several legal literatures on

the subject. A chapter of this book, at the tail of it, envisaged the jurisprudence of Cheque

Dishonor litigation when those are filed under SS.406/420 in lieu of filing under S.138 of NI

Act. As it is known that Cheque Dishonor litigations have been brought before the Courts

under SS.406/420 in the situation when the statutory limitation period for filing a case

under S.138 of NI Act elapse. I will be greatly glad and completely contented if this work

receives appreciation from its target groups. Let me, in this occasion, to render from the core

of my heart innumerable anticipatory thanks to the potential readers of this book. May

Almighty Allah be kind enough to shower His blessings on all of us.

Amen!

Regards


Jurisprudent,

Faculty of Law

University of Dhaka

Advocate, Judges’ Court, Dhaka

26.12.2009 AD

Preface to the second edition

After the last copy of the 1st edition of this book has been sold out from country’s law-book-

pavilions and as the time advanced in its normal course to this date the incumbent reality

demands another edition of this work. In pursuant to the demand of incumbent reality and

my present professional strata this edition might have some reflection on the subject from

the adjudicating experience (which only a Judge encounters through his day-to-day judicial

functions) of mine albeit for a short span of time. Sometimes circumstances arises when the

litigations u/SS. 406/420 PC brought before the Criminal Courts involves such claims which

are purely of civil nature and the relief the litigants seek through such complaint could easily

be sought to a competent Civil Court having jurisdiction on the subject matter. Litigations

u/SS.406/420 PC , if proven to be groundless, frivolous and vexatious then it must be

disposed of negatively within the framework of relevant provisions of Procedural Laws. But

dismissal of such complaints should be made with sufficient reasons to be recorded in the

Judicial orders. Nevertheless when litigations brought u/SS.406/420 PC involves claims of

both the civil and the criminal nature in a amalgamated format and on a multifaceted fact

then the Criminal Courts have to deal the matter very cautiously in a systematic judicial

approach. It is observed widely that cent percent litigations brought u/SS.406/420 PC

involves allegations of Cheating only and those are manifestly devoid of having within it any

ingredients of the offence of Criminal Breach of Trust. So, a keen inquiry and analysis is

obvious in detecting the actual nature of allegations brought in the dress of litigations

u/SS.406/420 PC. Finally, relevant it will be to say that though this book was mainly

designed for those who belonging to the Benches and the Bars are concerned with litigations

u/SS.406/420 PC but the law-readers and the Jurisprudes (students of the laws) shall also

found this as a help-kit in better understanding the Criminal Jurisprudence concerning the

crimes of ‘Criminal Breach of Trust and Cheating’.

Regards


Member, Bangladesh Judicial Service

Sr. Judicial Magistrate,

District of Mymensingh

20.11.12 AD

Chronology of chapters

Concise Contents

1. Introduction

2. The Penal Code: Creating certain offences as one of the substantive Criminal Law in

Bangladesh

3. Of offences against Property within the scheme of the Penal Code

4. Criminal Breach of Trust: The offences under this head within the scheme of the Penal Code

5. Cheating: The offences under this head within the scheme of the Penal Code

6. Jurisprudence of the Judicial Proceedings under Section.406 PC


8. Jurisprudence of the Judicial Proceedings under Sections. 406 /420 PC

9. Case laws on the matters of Criminal Breach of Trust and allied offences

10. Case laws on the matters of Cheating and allied offences

11. Instances involving the Civil matters in SS.406/420 litigations

12. Cheque Dishonor litigations U/S.138 of NI Act and U/SS. 406/420 PC

Appendix

Bibliographical Index

Elaborate Contents

1. Introduction

2. The Penal Code: Creating certain offences as one of the substantive Criminal Law in Bangladesh

3. Of offences against Property within the scheme of the Penal Code

4. Criminal Breach of Trust: The offences under this head within the scheme of the Penal Code

4.1. Criminal Breach of Trust

4.2. Criminal Breach of Trust by Carrier, etc.

4.3. Criminal Breach of Trust by clerk or servant

4.4. Criminal breach of trust by public servant, or by banker, merchant or agent

5.Cheating: The offences under this head within the scheme of the Penal Code

5.1. Cheating

5.2. Cheating by Personation

5.3. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is

bound to protect

5.4. Cheating and dishonestly inducing deliver of property


6.1. On the matters of Cognizance

6.2. Process(summons/warrant) that shall ordinarily be issued in the first instance

6.3. Appropriate Trial Court for trying the offences of Criminal Breach of Trust

6.4. The Quantum of punishment involved in these offences under the Code

6.5. On the matters of Compounding or Compromise

6.6. On the matters of Bail

6.7. On the matters of Charge /Discharge in the Trial Stage

6.8. On the matters of Appeal and Revision




7.3. Appropriate Trial Court for trying the offences of Cheating






8.Jurisprudence of the Judicial Proceedings under Sections. 406/420 PC



8.3. Appropriate Trial Court for trying the offences of Criminal Breach of Trust and/ or Cheating






9. Case laws on the matters of Criminal Breach of Trust and allied offences

10.Case laws on the matters of Cheating and allied offences

11.Instances involving the Civil matters in SS.406/420 litigations

11.1. Purely Civil Matters brought in the Criminal Actions

11.2. Judicial Proceeding involving Civil and Criminal matters mingled or amalgamated

12. Cheque Dishonor litigations U/S.138 of NI Act and U/SS. 406/420 PC

Appendix

Appendix I. Tables of Comparison: Offences of Criminal Breach of Trust, Cheating, Criminal

Misappropriation and Theft

• Offences of Criminal Breach of Trust, Cheating, Criminal Misappropriation and Theft: Mode of Taking Of Property(honest/dishonest)-Existence of consent of the owner(with /without) Table

• Criminal Breach of Trust Vs Cheating

• Criminal Breach of Trust Vs Criminal Misappropriation

• Criminal Breach of Trust Vs Theft

Appendix II. Some specimen of Judicial Enquiry on the litigation involving the allegations of Criminal

Breach of Trust and/or Cheating.


C h a p t e r

1

Introduction

C h a p t e r

1 Introduction

Criminal law, also termed as Penal law, encompasses the rules and statutes written by state legislator dealing with any criminal activity that causes harm to the general public, with penalties. It also covers criminal procedure connected with charging, trying, sentencing and imprisoning defendants convicted of crimes. It regulates how suspects are investigated, charged and tried. Criminal law also includes decisions by appellate courts that define and interpret criminal law and regulate criminal procedure, in the absence of clear legislated rules. In order to be found guilty of violating a criminal law, the prosecution must show that the defendant intended to act as he/she did. In other words, there had to be intention (Mens rea). Criminal law is typically enforced by the government. The state, through a prosecutor, initiates the suit. Criminal law encompasses Substantive Criminal law; Criminal Procedure; and the special problems in administration and enforcement of criminal justice.

Criminal Law: laws relating to the prevention and detection of crimes, trial of offenders and the level of punishment awarded to criminals when the charges brought against them are proved beyond all reasonable doubt in a duly constituted court of law. This branch of the legal system evolved over time through a fusion of English and indigenous traditions.

The indigenous tradition had two different streams. One was applicable to the Muslims who came within the purview of Muslim Law. On the other hand, there were Hindu customs. It took nearly three decades to give final shape to the codification of criminal law in British India. This codification is the result of the strenuous effort of two law commissions. The first of these commissions was established in 1837 in India and was led by THOMAS BABINGTON

MACAULAY . The second commission was established in England in 1853.

One of the controversial issues during the period was the separate dispensation provided to European subjects in India and the Indians. They came under the jurisdiction of separate sets of courts and laws. Equality of protection under the same law and a common judicature based on the principle of rule of law became issues of paramount importance. This is where Macaulay intervened. He defined the principle on which the codification of law must be based. He defined the principle as uniformity where it was possible to achieve and diversity where necessary. This was the guiding principle which initiated the process leading to the abolition of the dual system of judicial administration and the establishment of a secular legal system.

The process culminated in the enactment of the Indian Penal Code (Act XLV of 1860) and the CRIMINAL PROCEDURE CODE (Act XXV of 1861). These two Codes laid the foundation of criminal law in British India. After 1947, the title of the Indian Penal Code was changed to that of the Pakistan Penal Code. Similarly, after 1971, the Pakistan Penal Code came to be known as the Bangladesh PENAL CODE. Except for the changes in title the Penal Code more or less remained an immutable document with only minor modifications.

The same can be said of the Code of Criminal Procedure. It was framed to supplement the Penal Code which provides the substantive criminal law. The legal experts make a distinction between the Codes. The Code of Criminal procedure is defined as an adjective or procedural law while the Penal Code is defined as a substantive law. This distinction is valid for academic and operational purposes.

The Code of Criminal Procedure provides rules or procedures for (i) preventing offences, and (ii) bringing the offenders to justice for committing offences defined in the Penal Code or any special or local laws if no procedure is provided in such laws. It also specifies the classes of courts and their jurisdiction in which offenders may be prosecuted. It prescribes the procedures which are to be followed by various courts in an inquiry, trial or any other proceedings.

It would, however, be correct to say that the Code of Criminal Procedure contains certain provisions which are in the nature of substantive law, such as aid and information to the magistrates, the police and persons making arrests, processes to compel production of documents and other movable property and the discovery of persons wrongfully confined, preventive action of the police, the maintenance of wives and children, directions in the nature of Habeas Corpus and disposal of property.

The Penal Code, on the other hand, is concerned with defining the nature of an offence and if proved in a duly constituted court of law, the punishment that it entails. This is the broad distinction between the adjective law and the substantive law.

Outside the scope of the Penal Code, there are special and local laws that come within the purview of criminal law. The special laws deal with special type of offences which though envisaged in the Penal Code, do not guarantee adequate punishment or speedy trial. Instances include anti-corruption laws, laws to protect women from torture or attack etc. Local laws relate primarily to municipal laws that seek to ensure prevention of civic offences.

C h a p t e r

2

The Penal Code: Creating certain offences as one of the substantive Criminal Law in Bangladesh

C h a p t e r

2 The Penal Code: Creating certain offences as one of the substantive Criminal Law in Bangladesh

The Penal Code is the main criminal code of Bangladesh. It is a comprehensive code, intended to cover all substantive aspects of criminal law. It was drafted in 1860 and came into force in colonial India during the British Raj in 1862. It has since been amended several times and is now supplemented by other criminal provisions.

After independence, Indian Penal Code was inherited by Pakistan (now called Pakistan Penal Code) and Bangladesh, formerly part of British India. It was also adopted wholesale by the British colonial authorities in Burma, Sri Lanka, Malaysia, Singapore and Brunei, and remains the basis of the criminal codes in those countries.

History

During the Moghul rule courts administered the "Sharia" to the exclusion of Hindu law. Islamic law gave way to English criminal law with the increase of British influence in the Indian subcontinent. Before 1860, The English criminal law, as modified by several acts was administered in the Presidency-Towns of Bombay, Calcutta and Madras.

The draft of the Indian Penal Code was prepared by the First Law Commission, chaired by Thomas Babington Macaulay. Its basis is the law of England freed from superfluities, technicalities and local peculiarities. Elements were also derived from the Napoleonic Code and from Edward Livingston's Louisiana Civil Code of 1825. The first final draft of the Indian Penal Code was submitted to the Governor-General of India in Council in 1837, but the draft was again revised. The drafting was completed in 1850 and it was presented to the Legislative Council in 1856 but it did not take its place on the Indian statute book until a generation later, following the Indian Rebellion of 1857. The draft then underwent a very careful revision at the hands of Sir Barnes Peacock, Chief Justice, and the puisne Judges of the Calcutta Supreme Court who were members of the Legislative Council, and was passed into law on 6 October 1860. The Code came into operation on 1st January, 1862. Unfortunately, Macaulay did not survive to see his masterpiece come into force, having died near the end of 1859.

Objective

The objective of this Act is to provide a general penal code for India. Though not an initial objective, the Act does not repeal the penal laws which were in force at the time of coming into force in India. This was so because the Code does not contain all the offences and it was possible that same offences might have still been left out of the Code, which were not intended to be exempted from penal consequences. Though this Code consolidates the whole

of the law on the subject and is exhaustive on the matters in respect of which it declares the law, many more penal statutes governing various offences have been created in addition to the code.

Structure

Indian Penal Code, 1860, sub-divided into twenty three chapters, comprises five hundred and eleven sections. The code starts with an introduction, provides explanations and exceptions used in the code, and covers a wide range of offences. The Outline is presented in the following table:

THE PENAL CODE, 1860

(Sections 1 to 511)

Chapter Sections covered

Classification of offences

Chapter I Sections 1 to 5

Introduction

Chapter II Sections 6 to 52

General Explanations

1. Definitions in the Code, subject to exceptions (Section 6)

Chapter III

Sections 53 to 75

of Punishments

Chapter IV

Sections 76 to 106

General Exceptions

of the Right of Private Defence (Sections 96 to 106) Chapter V Sections 107

to 120 Of Abetment

Chapter VA

Sections 120A to 120B

Criminal Conspiracy

Added in 1913 Chapter VI

Sections 121 to 130

Of Offences against the State

Chapter VII

Sections 131 to 140

Of Offences relating to the Army, Navy and Air Force

Navy and Air Force: Added in 1927 Chapter VIII

Sections 141 to 160

Of Offences against the Public Tranquillity

Chapter IX

Sections 161 to 171

Of Offences by or relating to Public Servants

Chapter X Sections 172 to 190

Of Contempts of Lawful Authority of Public Servants

Chapter XI

Sections 191 to 229

Of False Evidence and Offences against Public Justice

Chapter XII

Sections 230 to 263

Of Offences relating to coin and Government Stamps

Chapter Sections 264 Of Offences relating to Weight and Measures

XIII to 267 Chapter XIV

Sections 268 to 294

Of Offences affecting the Public Health, Safety, Convenience, Decency and Morals

Chapter XV

Sections 295 to 298

Of Offences relating to Religion

Chapter XVI

Sections 299 to 377

Of Offences affecting the Human Body

1. Of Offences Affecting Life including murder, culpable homicide (Sections 299 to 311)

2. Of the Causing of Miscarriage, of Injuries to Unborn Children, of the Exposure of Infants, and of the Concealment of Births (Sections 312 to 318)

3. Of Hurt (Sections 319 to 338) 4. Of Wrongful Restraint and Wrongful Confinement

(Sections 339 to 348) 5. Of Criminal Force and Assault (Sections 349 to 358) 6. Of Kidnapping, Abduction, Slavery and Forced Labour

(Sections 359 to 374) 7. Sexual Offences including rape (Sections 375 to 376) 8. Of Unnatural Offences (Section 377)

Chapter XVII

Sections 378 to 462

Of Offences Against Property

1. Of Theft (Sections 378 to 382) 2. Of Extortion (Sections 383 to 389) 3. Of Robbery and Dacoity (Sections 390 to 402) 4. Of Criminal Misappropriation of Property (Sections 403

to 404) 5. Of Criminal Breach of Trust (Sections 405 to 409) 6. Of the Receiving of Stolen Property (Sections 410 to

414) 7. Of Cheating (Section 415 to 420) 8. Of Fraudulent Deeds and Disposition of Property

(Sections 421 to 424) 9. Of Mischief (Sections 425 to 440) 10. Of Criminal Trespass (Sections 441 to 462)

Chapter XVIII

Sections 463 to 489

Of Offences relating to Documents and Property Marks

1. Of Property and Other Marks (Sections 478 to 489) 2. Of Currency Notes and Bank Notes (Sections 489A to

489E)

Added in 1958 Chapter XIX

Sections 490 to 492

Of the Criminal Breach of Contracts of Service

Chapter XX

Sections 493 to 498

Of Offences Relating to Marriage

Chapter XXA

Sections 498A

Of Cruelty by Husband or Relatives of Husband

Added in 1983

Chapter XXI

Sections 499 to 502

Of Defamation

Chapter XXII

Sections 503 to 510

Of Criminal intimidation, Insult and Annoyance

Chapter XXIII

Section 511 Of Attempts to Commit Offences

Acclaim

The Code is universally acknowledged as a cogently drafted code, ahead of its time. It has substantially survived for over 150 years in several jurisdictions without major amendments. Nicholas Phillips, Justice of Supreme Court of United Kingdom applauded the efficacy and relevance of IPC while commemorating 150 years of IPC. Modern crimes involving technology unheard of during Macaulay's time fit easily within the Code mainly because of the broadness of the Code's drafting.

The offences under any law (mostly the Penal Code) are classified as cognizable and non-cognizable, as bailable or non-bailable and by the lowest courts which can try them. These are given and defined in the Second Schedule of the Code of Criminal Procedure, 1898.

Explanatory Notes

(1)

In regard to offences under the Penal Code, the entries in the second and third columns against a section the number of which is given in the first column are not intended as the definition of, and the punishment prescribed for, the offence in the Indian penal Code, but merely as indication of the substance of the section.

(2) In this Schedule,

(i) the expression "Magistrate of the first class" and “Any Magistrate" include Metropolitan Magistrates but not Executive Magistrates;

(ii) the word "cognizable" stands for a "a police officer may arrest without warrant";

and

(iii) the word "non-cognizable" stands for "a police officer shall not arrest without warrant".

(3) Herein

(i) "bailable" means the person shall be offered to be released on suitable bail upon his arrest [by the police or the court] {informing about his right to be so released}

and

(ii) "non-bailable" means shall not be automatically entitled to be released on bail [but does not mean that the court may not order him to be released on a suitable bail - with or without any conditions]

C h a p t e r

3

Of offences against Property within the scheme of the Penal Code

C h a p t e r

3 Of offences against Property within the scheme of the Penal Code

Crimes Against Property

Crime against property is any criminal act that destroys another's property, or that deprives an owner of property against the owner's will. The criminal law generally considers these crimes less serious than violent crimes, or crimes against persons, but they can still constitute very serious felony charges.

Arson and vandalism are examples of crimes that destroy another's property. Examples of crimes that unwillingly deprive an owner of property are far more abundant, including larceny, embezzlement, receiving stolen goods, extortion (blackmail), robbery (a combination of violent crime and crime against property), burglary, and industrial espionage, to name just a few. There are also a wide range of crimes that fall under the domain of intellectual property law, and the occurrence of these is rising sharply as information becomes a stronger and stronger motive force in the economies of the developed and developing world.

At early British common law, there was only one kind of crime against property, larceny. There was also only one punishment for larceny in those times: death. As time went on and judges became more and more reluctant to execute people for pick-pocketing and petty theft, many crimes that bore striking resemblance to larceny were classified as something else so that the death penalty could be avoided. In the United States today, where life and liberty are categorically valued above property, no crime against property is considered serious enough to warrant the death penalty.

The offences against property are envisaged in Chapter XVII of the Penal Code into three cardinal groups and in 86 sections. They can be grouped as follows: 1. Offences concerning the deprivation of property (SS.378-424).

2. Offences concerning damage to property (SS.425-440).

3. Offences concerning violation of rights to property in order to commit some other

offences (SS.441-462).

1. Offences concerning the deprivation of property (SS.378-424):

The following offences created by the Code fall under this head—

a. Theft (SS. 378-382).

b. Extortion (SS. 383-389).

c. Robbery (SS. 390, 392-394, 397, 398 & 401).

d. Dacoity (SS. 391, 395-400 & 402).

e. Criminal misappropriation of property(SS. 403 & 404).

f. Criminal breach of trust(SS. 405-409).

g. Receiving stolen property(SS. 410-414).

h. Cheating(SS. 415-420).

i. Fraudulent deeds and disposition of property(SS. 421-424).

2. Offences concerning damage to property (SS.425-440):

The offence of Mischief and its aggravated forms created by the Code fall under this

head.

3. Offences concerning violation of rights to property in order to commit some other

offences (SS.441-462):

The following offences created by the Code fall under this head—

a. Criminal trespass (SS. 441 and 447).

b. House-trespass (SS. 442, 448-452).

c. Lurking house-trespass (SS. 443, 444 & 453).

d. House breaking (SS. 445-462).

C h a p t e r

4

Criminal Breach of Trust: The offences under this head within the scheme of the Penal Code

C h a p t e r

4 Criminal Breach of Trust: The offences under this head within the scheme of the Penal Code 4.1. Criminal Breach of Trust

The offence of Criminal Breach of Trust has been given its statutory position in Sections 405-

409 of the Penal Code. The definition of this offence as enumerated in S.405 of the Code

reads as under:

Section 405. 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".

Illustrations

(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which

directs him to divide the effects according to the will, and appropriates them to his own use.

A has committed criminal breach of trust.

(b) A is a warehouse-keeper. Z, going on a journey, entrusts his furniture to A, under a

contract that it shall be returned on payment of a stipulated sum for warehouse-room. A

dishonestly sells the goods. A has committed criminal breach of trust.

(c) A, residing in Dhaka, is agent for Z, residing at Chittagong. There is an express or implied

contract between A and Z, that all sums remitted by Z to A shall be invested by A, according

to Z's direction. Z remits a lakh of taka to A, with directions to A to invest the same in

Company's paper. A dishonestly disobeys the directions and employs the money in his own

business. A has committed criminal breach of trust.

(d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be

more for Z's advantage to hold shares in the Bank of Bengal, disobeys Z's directions, and

buys shares in the Bank of Bengal, for Z, instead of buying Company's paper, here, though Z

should suffer loss, and should be entitled to bring a civil action against A, on account of that

loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a revenue-officer, is entrusted with public money and is either directed by law, or

bound by a contract, express or implied, with the Government, to pay into a certain treasury

all the public money which he holds. A dishonestly appropriates the money. A has committed

criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A

dishonestly misappropriates the property. A has committed criminal breach of trust.

Punishment for criminal breach of trust

Section 406. Whoever commits criminal breach of trust shall be punished with imprisonment

of either description for a term which may extend to three years, or with fine, or with both.

Aggravated forms of Criminal Breach of Trust

The following are the aggravated forms of Criminal Breach of Trust:-

1. Criminal Breach of Trust by a carrier, wharfinger or warehouse-keeper. (S.407) Punishment.—Imprisonment of either description for 7 years and fine. (S.407) 2. Criminal Breach of Trust by a clerk or servant. (S.408) Punishment.— Imprisonment of either description for 7 years and fine. (S.408) 3. Criminal Breach of Trust by public servant, banker, merchant, factor, broker, attorney or agent. (S.409) Punishment.— Imprisonment of either description for 10 years and fine. (S.409)

4.2. Criminal Breach of Trust by Carrier, etc.

Section 407. Whoever, being entrusted with property as a carrier, wharfinger or warehouse-

keeper, commits criminal breach of trust in respect of such property, shall be punished with

imprisonment of either description for a term which may extend to seven years, and shall also

be liable to fine.

4.3. Criminal Breach of Trust by clerk or servant

Section 408. Whoever, being a clerk or servant or employed as a clerk or servant, and being

in any manner entrusted in such capacity with property, or with any dominion over property,

commits criminal breach of trust in respect of that property, shall be punished with

imprisonment of either description for a term which may extend to seven years, and shall also

be liable to fine.

4.4. Criminal breach of trust by public servant, or by banker, merchant or agent

Section 409. 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 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.

Legal Literature on the offence of Criminal Breach of Trust

Section 405. of PC defines Criminal breach of trust in the following words-

“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.”

That is to say that the beneficial interest in the property in respect of which the offence is alleged to have been committed was vested in some person other than the accused, and that the accused held the property on behalf of that person. A relationship is created between the transferor and transferee, whereunder the transferor remains the legal owner of the property and the transferee has only the custody of the property for the benefit of the transferor himself or someone else. At best the transferee, obtains in the property entrusted to him only a special interest limited to a claim for his charges in respect of safe retention, and under no circumstances does he acquire a right to dispose of that property in contravention of the entrustment.

The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or With dominion over it, dishonestly misappropriates it, or converts it to his own use, or-dishonestly uses it or disposes it of in violation of any direction of law prescribing the mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or willfully suffers any other person so to do.

It cannot however be said that it is impossible, under all circumstances, for a person to commit criminal breach of trust in respect of his own property. Where the accused who pledged promissory notes with the complainant as security for a loan, induced him to hand them over to him (i.e. the accused) by pretending that he required them to collect money from his debtors with the aid of which he would pay cash to him (i.e. the complainant), it was held that the possession of the promissory notes, even without endorsement, in the hands of the person, with whom they were pledged, was of some value to the complainant as it gave him control over the accused and so long as they remained with him, they prevented the accused from using them to discharge the debts due by him to other creditors in preference to him and the complainant had thus, some sort of beneficial interest in the property and when he gave the notesto the accused for a definite purpose and the accused dishonestly disposed of them in violation of the legal contract, there was both entrustment and dishonest misappropriation.

The following ingredients are necessary to attract the operation of section 405.

(a) The accused must be entrusted with property or dominion over the property; and

(b) The person so entrusted (i.e., the accused) must-

(i) dishonestly misappropriate, or convert to his own use, that property, or

(ii) dishonestly use or dispose of that property or willfully suffer any other person to do so in violation of

(1) any direction of law, prescribing the mode, in which such trust is to be discharged, or

(2) any legal contract made touching the discharge of such trust.

Criminal Breach Of Trust

The offence of criminal breach of trust, as defined under this section, is similar to the offence of embezzlement under the English law. A reading of the section suggests that the gist of the offence of criminal breach of trust is ’dishonest misappropriation’ or ’conversion to own use’ another’s property, which is nothing but the offence of criminal misappropriation defined u/s 403. The only difference between the two is that in respect of criminal breach of trust, the accused is entrusted with property or with dominion or control over the property.

As the title to the offence itself suggests, entrustment or property is an essential requirement before any offence under this section takes place. The language of the section is very wide. 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. “The term “entrusted” found in a 405, IPC governs not only the words “with the property” immediately following it but also the words “or with any dominion over the property”.

In the case of State of Gujarat vs Jaswantlal Nathalal, the government sold cement to the accused only on the condition that it will be used for construction work. However, a portion of the cement purchased was diverted to a godown. The accused was sought to be prosecuted for criminal breach of trust. The Supreme Court held that the expression ‘entrustment’ carries with it the implication that the person handing over any property or on whose behalf that

property is handed over to another, continues to be its owner. Further, the person handing over the property must have confidence in the person taking the property. so as to create a fiduciary relationship between them. A mere transaction of sale cannot amount to an entrustment. If the accused had violated the conditions of purchase, the only remedy is to prosecute him under law relating to cement control. But no offence of criminal breach of trust was made out.

In Jaswant Rai Manilal Akhaney vs State of Bombay, It was held that when securities are pledged with a bank for specific purpose on specified conditions, it would amount to entrustment. Similarly, properties entrusted to directors of a company would amount to entrustment, because directors are to some extent in a position of trustee. However, when money was paid as illegal gratification, there was no question of entrustment.

In the case of State of UP vs Babu Ram, the accused, a sub-inspector (SI) of police, had gone to investigate a theft case in a village. In the evening, he saw one person named Tika Ram coming from the side of the cannal and hurriedly going towards a field. He appeared to be carrying something in his dhoti folds. The accused searched him and found a bundle containing currency notes. The accused took the bundle and later returned it. The amount returned was short by Rs. 250. The Supreme Court held that the currency notes were handed over to the SI for a particular purpose and Tika Ram had trusted the accused to return the money once the accused satisfied himself about it. If the accused had taken the currency notes, it would amount to criminal breach of trust..

In Rashmi Kumar vs Mahesh Kumar Bhada the Supreme Court held that when the wife entrusts her stridhana property with the dominion over that property to her husband or any other member of the family and the husband or such other member of the family dishonestly misappropriates or converts to his own use that property, or willfully suffers and other person to do so, he commits criminal breach of trust.

Entrustment

As the title to the offence itself suggests, entrustment of property is an essential requirement before any offence under this section takes place. The language of the section is very wide. 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. The word entrust is not a word of art. In common parlance, it embraces all cases in which a thing handed over by one person to another for specific purpose. It need not be express it may be implied. It not only covers the relationship of a trustee and beneficiary between the complainant and the accused, like master and servant, guardian and ward, and the Pledgor and Pawnee. It connotes that the accused holds the property for, and on behalf of another. Hence in all such transactions like that of a consignor and consignee, bailor and bailee and hirer and hiree, there is an element of trust implied in the transaction because in all such relation, the property entrusted to the accused is ‘property of another person’.

In order to constitute a legal entrustment, therefore, the complainant must be the owner of the property; there must be a transfer of possession; such transfer must be actual transfer, and not a fictional or notional one; such transfer should be made to somebody who has no right excepting that of a custodian, and such entrustment must be made to a person, and not to a company or a firm. These are the 5 cardinal criteria or ‘panchsheel’ of a legal entrustment.

Mere transaction of sale cannot amount to an entrustment; entrustment means that the person handing over any property, or on whose behalf that property is handed over to another, must have confidence in the person, taking the property, so as to create a fiduciary relationship between them. The word entrustment in this section, governs not only the words ‘with the property’ immediately following it, but also the word ‘or with any dominion over the property’, occurring thereafter. Similarly, the managing director of a company, including the amounts received from the subscribers, and dominion is as good as entrustment for the purpose of this section.

For a valid entrustment it is not necessary that the accused should receive the money directly from the complainant. In the case of Dwarkadas Haridas v Emperor Where under the terms of a contract, some goods were entrusted to the accused, who was to sell those goods, obtain money for them, and that money on account of the complainant, it was held that though he didn’t actually receive the money from the complainant, he was ‘entrusted’ with it within the meaning of this section.

Property

The definition in a 405 does not restrict the property to movables or immoveable alone. In the case of R K Dalmia vs Delhi Administration, the Supreme Court held that the word ‘property’ is used in the Code in a much wider sense than the expression ‘moveable property’. There is no good reason to restrict the meaning of the word ‘property’ to moveable property only, when it is used without any qualification in s 405. Whether the offence defined in a particular section of IPC can be committed in respect of any particular kind of property, will depend not on the interpretation of the word ‘property’ but on the fact whether that particular kind of property can be subject to the acts covered by that section.

The word ‘dominion’ connotes control over the property. In Shivnatrayan vs State of Maharashtra, it was held that a director of a company was in the position of a trustee and being a trustee of the assets, which has come into his hand, he had dominion and control over the same.

However, in respect of partnership firms, it has been held29 that though every partner has dominion over property by virtue of being a partner, it is not a dominion which satisfies the requirement of s 405, as there is no ‘entrustment of dominion, unless there is a special agreement between partners making such entrustment.

Explanations (1) and (2) to the section provide that an employer of an establishment who deducts employee’s contribution from the wages payable to the employee to the credit of a provident fund or family pension fund or employees state insurance fund, shall be deemed to be entrusted with the amount of the contribution deducted and default in payment will amount of the contribution deducted and default in payment will amount to dishonest use of the amount and hence, will constitute an offence of criminal breach of trust. In the case Employees State Insurance Corporation vs S K Aggarwal, the Supreme Court held that the definition of principal employer under the Employees State Insurance Act means the owner or occupier. Under the circumstances, in respect of a company, it is the company itself which owns the factory and the directors of the company will not come under the definition of ‘employer.’ Consequently, the order of the High Court quashing the criminal proceedings initiated u/ss 405 and 406, IPC was upheld by the Supreme Court

Misappropriation

Dishonest misappropriations the essence of this section. Dishonesty is as defined in sec.24, IPC, causing wrongful gain or wrongful loss to a person. The meaning of wrongful gain and wrongful loss is defined in sec 23, IPC. In order to constitute an offence, it is not enough to establish that the money has not been accounted for or mismanaged. It has to be established that the accused has dishonestly put the property to his own use or to some unauthorized use. Dishonest intention to misappropriate is a crucial fact to be proved to bring home the charge of criminal breach of trust.

Proof of intention, which is always a question of the guilty mind or mens rea of the person, is difficult to establish by way of direct evidence. In Krishan Kumar V UOI, the accurse was employed as an assistant storekeeper in the Central Tractor Organisation (CTO) at Delhi. Amongst other duties, his duty was the taking of delivery of consignment of goods received by rail for CTO. The accused has taken delivery of a particular wagonload of iron and steel from Tata Iron and Steel Co, Tatanagar, and the goods were removed from the railway depot but did not reach the CTO. When questioned, the accused gave a false explanation that the goods had been cleared, but later stated that he had removed the goods to another railway siding, but the goods were not there. The defence version of the accused was rejected as false. However, the prosecution was unable to establish how exactly the goods were misappropriated and what was the exact use they were put to. In this context, the Supreme Court held that it was not necessary in every case to prove in what precise manner the accused person had dealt with or appropriated the goods of his master. The question is one of intention and not direct proof of misappropriation.

The offence will be proved if the prosecution establishes that the servant received the goods and that he was under a duty to account to his master and had not done so. In this case, it was held that the prosecution has established that the accused received the goods and removed it from the railway depot. That was sufficient to sustain a conviction under this section. Similarly, in Jaikrishnadas Manohardas Desai vs State of Bombay, it was held that dishonest misappropriation or conversion may not ordinarily be a matter of direct proof, but when it is established that property, is entrusted to a person or he had dominion over it and he has rendered a false explanation for his failure to account for it, then an inference of misappropriation with dishonest intent may readily be made. Prosecution need not establish the precise mode of dishonest misappropriation of conversion.

In Surendra Prasad Verma v State of Bihar, the accused was in possession of the keys to a safe. It was held that the accused was liable because he alone had the keys and nobody could have the access to the safe, unless he could establish that he parted with the keys to the safe.

The offence under section 405 can be said to have committed only when all of its essential ingredients are found to have been satisfied. As in the case of criminal misappropriation, even a temporary misappropriation could be sufficient to warrant conviction under this section. Even if the accused intended to restore the property in future, at the time misappropriation, it is a criminal breach of trust.

Doctrine of Public Trust and Interpretation of Cour ts of Law

In the case of Common Cause, A Registered Society v Union of India and in the case of Shiva Sagar Tiwari v Union of India, it was held by the Supreme court that a minister is in a position of trustee in respect of public property under his charge and discretion, and he must therefore deal with people’s property in just and fair manner, failing which he or she would be personally liable for criminal breach of trust.

In the case of Common Cause, the apex court imposed a fine of Rs 50 lakh on Captain Satish Sharma, former petroleum minister in the P V Narsimha Rao’s government for arbitrary exercise of discretionary power of minister in allotment and distribution of petrol pumps and cooking gas agencies; and ordered the central Bureau of Investigation. To probe into the allotment scam and institute criminal proceedings for committing breach of trust against Captain Satish Sharma for abuse of office during his tenure as minister.

The bench consisting of justices Kuldeep Singh and Faizanuddin, setting aside order of allotment of petrol pumps said”

Not only the relatives of most of the officials working for Captain Satish Sharma but even his own driver and the driver of his additional Private Secretary have been allotted a petrol pump and a gas agency respectively……………. There is nothing on the record to indicate that the Minister kept any criteria in view while making the allotments………….. no criteria was fixed, no guidelines were kept in view, none knew how many petrol pumps were available for allotment, applications were not invite and the allotments of petrol pumps were made in an arbitrary and discriminatory manner.”

The court explained that in a welfare state the Government provides a large number of benefits to the citizens and held:

“A Minister who is the executive head of the department concerned distributed these benefits and largesse (generosity)s. He is elected by the people and is elevated to a position where he holds a trust on behalf of the people. He has to deal with the peoples’ property in a fair and just manner. He cannot commit breach of the trust reposed in him by the people.”

In the case of Shiv Sagar Tiwara v Union of India, the apex court levied a fine of 60 lakhs on Mrs. Sheila Kaul, former Union Minister for Housing and Urban Development and former govermor of Himachal Pradesh and cancelled the allotment of 52 shops and kiosks (stalls) for arbitrarily, oppressively and un-constitutionally allotting the shops to her relatives, friends and staff members during her tenure as Minister. The court directed the Government to formulate an allotment policy within two months and complete the process of allotment within four months.

Justice Kuldeep Singh and Justice Hansaria, while imposing the fine said

“Since the properties she was dealing with were Government properties, the government by the people has to be compensated for breach of public trust. Mrs. Kaul should pay for causing pecuniary loss to the exchequer for action in an “oppressive and mala fide manner”, while making shop allotments.

However the apex court in a review petition filed by Mrs. Kaul, quashed the damages on compassionate ground having regard to the peculiar facts and circumstances of Mrs. Kaul, who was stated to be old, ailing and passing through great hardship.

It was thought that these decision have set at rest the controversy in respect of exercise of discretionary power by the Ministers, Governors etc., and have established jurisprudence of public accountability and transparency in the Government’s working and would be an eye opener to persons in high positions to exercise powers with restraint so as not to make it farce and mockery of rule of law and democratic process. But to the dismay of common man and disappointment to legal fraternity in a review petition, a three member bench of the Supreme Court consisting of the Justices Saghir Ahmed, Venkatswami and Rajendra Babu turned down its earlier decision of November 4 1996 and ordered for the refund of sum of Rs. 50 lakh to the petitioner and quashed the order of the court for launching of prosecution against Capt. Sharma for criminal breach of trust under section 406, IPC.

While endorsing the findings, it was found by the court that the conduct of the Minister was wholly unjustified, the court said nevertheless it falls short of “misfeasance”; and the petitioner “Common Cause”, not being an applicant for allotment, it could not claim to have suffered any damage or loss on account of conduct of Minister. There has to be an identifiable plaintiff or claimant whose interest are damaged by the public officer (tort feaser) maliciously or with the knowledge that the impugned section was likely to injure the interest of that person. As regards the imposition of pecuniary damages, it was said by the court:

“State cannot derive itself the right of being compensated by its officers on the ground that they had contravened or violated the fundamental rights of a citizen. Directing the Minister to pay, a sum of 50 lakh to the Government, would amount to asking the government to pay exemplary damages to itself, which is not tenable under law”.

Lastly, it was said by the court that the ‘Doctrine of Public Trust’ is not applicable in the case of ministers in discharging their duties.

I fail to understand the logic of such a farfetched argument that though the act of the Minister is wrong, it is not actionable, it also a derogation from the maxim of ‘Ubi jus ibi remedium’, this should not be so especially in a democratic country like India where public trust is the breath of the system. With due respect to the court that in a democracy the court cannot shirk from its constitutional responsibility by pleading its inability to provide remedy applying the colonial theory of “the king can do no wrong”. Another assumption of the court, that ‘the minister does not assume the role of a trustee’ in the real sense, nor does a trust comes into existence, is misleading. Moreover the fact that there is no injury to a third person in the present case is not enough to make the principle of public accountability inapplicable in as much as there was injury to the high principle of public law, that a public functionary has to use its power for the bona fide purpose and in a transparent manner.

Criminal Breach of Trust by Public Servant or by Banker or by Agent

Section 409 of PC says – 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 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.

The acts of criminal breach of trust done by strangers is treated less harshly than acts of criminal breach of trust on part of the persons who enjoy special trust and also in a position to be privy to a lot of information or authority or on account of the status enjoyed by them, say as in the case of a public servant. That is why section 407 and 408 provide for enhanced punished of up to seven years (which is generally three years or/with fine) in the case of commission of offence of criminal breach of trust by persons entrusted with property as a carrier, wharfinger or warehouse-keeper.

In respect of public servants a much more stringent punishment of life imprisonment or imprisonment up to 10 years with fine is provided. This is because of special status and the trust which a public servant enjoys in the eyes of the public as a representative of the government or government owed enterprises. Under section 409, IPC, the entrustment of property or dominion should be in the capacity of the accused as a public servant, or in the way of his business as a banker, merchant broker, etc. The entrustment should have nexus to the office held by the public servant as a public servant. Only then this section will apply.

In the case of Superintendent and Remembrance of Legal Affairs v. S K Roy, the accused a public servant in his capacity as a Superintendent of Pakistan unit of Hindustan Co-operative Insurance Society in Calcutta, which was a unit of LIC, although not authorized to do so, directly realized premiums in cash from Pakistani policy holders and misappropriated the amounts after making false entries in the relevant registers.

To constitute an offence of criminal breach of trust by a public servant under sec 409, IPC, the acquisition of dominion or control over the property must also be in the capacity of a public servant. The question before the court was whether the taking of money directly from the policy holders, which was admittedly unauthorized, would amount to acting in his capacity as a public servant. The Supreme Court held that it is the ostensible or apparent scope of a public servant’s authority when receiving the property that has to be taken into consideration. The public may not aware of the technical limitations of the powers of the public servants, under some internal rules of the department or office concerned. It is the use made by the public servant of his actual official capacity, which determines whether there is sufficient nexus or connection between the acts complained of and the official capacity, so as to bring the act within the scope of the section. So, in this case it was held that the accused was guilty of the offence under sec 409.

Dishonest Intention

Unless dishonest intention is shown, an offence under sec 405, PC, cannot be committed. Every breach of trust in the absence of mens rea, is not criminal. The court should ascertain whether the state of mind in which the accused was, did not exclude the existence of dishonest intention which is an essential ingredient of the offence of criminal breach of trust. Evidence is certainly relevant for purpose of ascertaining whether the state of mind of accused render it possible or likely for him to have entertained dishonest intention when he dealt with the moneys entrusted to him. If the accused was really unable to form the criminal intention, he cannot be guilty of the offence under section 406.

In the case of Mohanlal Mulchand v Mehta Kanaiyalal Pranshanker, certain title deeds were entrusted to the accused for the purpose of making enquiries about some land. The accused did not return the documents and said that he had lost the bundle and that the task was not completed. It was found that the accused had used the title deeds to harm the transferee. Under these facts, it was held that the offence was complete when the documents were used to harm the transferee and that taking of money was not necessary to constitute the offence.

The prosecution is not bound to establish the mode in which the accused has appropriated the amount of entrustment. Dishonest misappropriation may be inferred from the established facts. Dishonest intention was held to have been proved in the case of a post master who entered an amount in the saving bank pass book of a depositor without entering the same in his account book.Where the accused took a gold jewel from a goldsmith for showing it to his wife and placing an order for a similar jewel but failed to return it and retained it with him towards some debt due to him by the goldsmith and claimed it to be his own, it was held that the accused was guilty of dishonestly retaining it and claiming it to be his by misappropriating it.

Every breach of trust gives rise to a suit for damages, but it is only when there is an evidence of mental act of fraudulent misappropriation that the commission of embezzlement of any sum of money becomes a panel offence punishable as criminal breach of trust. A mere breach of contract is not synonymous with criminal breach of trust. It is the mental act of fraudulent misappropriation that distinguishes an embezzlement, amounting to a civil wrong or tort, from the offence of criminal breach of trust. If there is no mens rea, or if other essential ingredients are lacking, the same set of facts would not sustain a criminal prosecution though a civil action may lie. A mere failure to repay the loan would not constitute a criminal breach of trust. Where the managing agents acted dishonestly, it was held that they were not liable for criminal breach of trust even though there has been a breach of contract causing loss to the policy holders of the company. The mere fact that the payment was delayed in no ground for imputing a criminal intention on the part of the accused, when there is no particular obligation to pay it at a certain date.

C h a p t e r

5

Cheating: The offences under this head within the scheme of the Penal Code

C h a p t e r

5

Cheating: The offences under this head within the scheme of the Penal Code

At law, cheating is a specific criminal offence relating to property. Historically, to cheat was to commit a misdemeanour at common law. However, in most jurisdictions, the offence has now been codified into statute. In most cases the codified statutory form of cheating and the original common law offence are very similar, however there can be differences. For example, under English law it was held in R. v. Sinclair [1968] 3 All 241 at 246 that "[t]o cheat and defraud is to act with deliberate dishonesty to the prejudice of another person's proprietary right." However at common law a great deal of authority suggested that there had to be contrivance, such that the public were likely to be deceived and that "common prudence and caution are not sufficient security against a person being defrauded thereby". Examples of cheating upheld by the courts have included fraudulently pretending to have power to discharge a soldier using false weights or measures, and playing with false dice.

In relation to the common law offence, no judicial definition of the offence was ever laid down, but the description of the offence set down in Stephen's Criminal Digest is regarded as fairly comprehensive, and is cited as an authoritative definition by Stroud's Judicial Dictionary.

Every one commits the misdemeanor called cheating who fraudulently obtains the property of another by any deceitful practice not amounting to felony, which practice is of such a nature that it directly affects, or may directly affect, the public at large. But it is not cheating, within the meaning of this article, to deceive any person in any contract or private dealing by lies, unaccompanied by such practices as aforesaid.

5.1. Cheating

Section 415. 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".

Explanation−. A dishonest concealment of facts is a deception within the meaning of this section.

Illustrations (a) A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean, to pay. A cheats. (b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article, A cheats. (c) A, by exhibiting to Z a false sample of an article, intentionally deceives Z into believing that the article corresponds with the sample, and thereby dishonestly induces Z to buy and pay for the article. A cheats. (d) A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonoured, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats. (e) A, by pledging as diamonds articles which he knows are not diamonds intentionally deceives Z, and thereby dishonestly induces Z to lend money. A cheats. (f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats. (g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intent to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract. (h) A intentionally deceives Z into a belief that A has performed A's part of a contract made with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats. (i) A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receive the purchase or mortgage money from Z, A cheats. Punishment for Cheating

Section 417. Whoever cheats shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both.

Aggravated forms of Cheating

The following are the aggravated forms of cheating:-

1. Cheating with knowledge that wrongful loss may thereby be caused to a person whose interest the offender is bound to protect. (S.418) Punishment.—Imprisonment of either description for 3 years or fine or both. (S.418) 2. Cheating by personation. (SS.416 and 419) Punishment.— Imprisonment of either description for 3 years or fine or both. (S.419) 3. Cheating and thereby dishonestly inducing 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 to being converted into a valuable security. (S.420) Punishment.— Imprisonment of either description for 7 years and fine. (S.420)

5.2. Cheating by Personation

Section 416. A person is said to "cheat by personation" if he cheats by pretending to be some other person, or by knowingly substituting one person for another, or representing that he or any other person is a person other than he or such other person really is. Explanation.-The offence is committed whether the individual personated is a real or imaginary person.

Illustrations (a) A cheats by pretending to be a certain rich banker of the same name. A cheats by personation. (b) A cheats by pretending to be B, a person who is deceased. A cheats by personation.

Punishment for Cheating by personation

Section 419. Whoever cheats by personation shall be punished with imprisonment of either

description for a term which may extend to three years, or with fine, or with both.

5.3. Cheating with knowledge that wrongful loss may ensue to person whose interest offender is

bound to protect

Section 418. Whoever cheats with the knowledge that he is likely thereby to cause wrongful

loss to a person whose interest in the transaction to which the cheating relates, he was bound

either by law, or by legal contract, to protect, shall be punished with imprisonment of either

description for a term which may extend to three years, or with fine, or with both.

5.4. Cheating and dishonestly inducing deliver of property

Section 420. 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 to 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.

Legal Literature on the offence of Cheating

In the definition of cheating there are set forth two distinct classes of the acts which the person deceived may be induced to do. In the first place, he may be induced to do deliver any property to any person or to consent that any person shall retain any property. 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 acts the inducing must be intentional.1 To constitute the offence of cheating it is not necessary that the act which the person deceived is induced to do should actually cause harm to him. It is enough that the act which person deceived is induced to do should actually cause harm to him. It is enough that the act which the person deceived has been induced to perform is likely to cause damage or harm to him.2

Ingredients of the offence of Cheating

The prosecution must prove the following points for convicting an accused on a charge of cheating-

1. Deception of any person.3

2. (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 cause, damage or harm to that person in body, mind, reputation or property.4

The ingredient of cheating can be explained with reference to the decided cases. In the case of Rex v. Narain Rao,5 a debtor sent to his creditor a postal cover insured for Rs. 70. The 1 Kishori Lal Chatterji (1905) 9 C.W.N. 764,767, per Geidt J.

2 Harish Chandra v. Rex (1948) A.L.J. 502: A.I.R. 1949 All. 15.

3 Prithiraj v. State (1958) 10 D.L.R. 325.

4 Raman Behari Roy v. Emperor (1923) I.L.R. 50 Cal. 849 at 851.

5 (1948) A.L.J. 303: I.L.R. (1948) All. 374.

creditor took delivery after signing the postal receipt and when the cover was opened it was found to contain seven one rupee notes and four blank sheets of paper. The debtor gave notice to creditor to set off the sum of Rs. 70 alleged to have been sent by him under the insured cover. It was held that the debtor was guilty of cheating and not merely of an attempt to cheat, as he obtained by deceiving his creditor such a document as is likely to facilitate the evasion of payment by the debtor and to cause embarrassment to the creditor when he seeks to enforce his claim.

In the case of Kadir Bux6, a person hired certain property for use at a wedding, paying a portion of the hire, and giving a written promise to pay the balance of the hire, and to restore the property after the wedding, he being well aware that there was to be no wedding, and intending, when he got the property, to apply for its attachment in a civil suit in respect of an alleged claim. It was held that he was guilty of cheating.

In the case of Krishnan7, the appellant, who was an assistant to the Traffic Head Constable, took money from applicants for licenses for the driving of motor cars and other vehicles, promising to procure licenses for them without the necessity of their undergoing any tests. He arranged everything for the applicants, filled in their forms, forged the certificates attached to the applications, filed them in as if the tests had been completed, made entries himself in the Test Register, and then got the applications sent to the various officials in the office, upon which the licenses were in due course issued. It was held that the appellant was guilty of the offence of cheating under the first part of the definition in this section. “Fraudulently” and “dishonestly” imply some idea of wrongful loss to a person or wrongful gain. Fraud is committed if any advantage is expected to the person who causes the deceit. The act done by the appellant was fraudulent in that it procured a wrongful advantage to him. The license was “property” within the meaning of the section. As soon as the license reached the hands of the licensee, it had an actual value but even before it reached his hands, it was of value to the appellant, because without the license he would have been unable to fulfill his agreement and retain the money that was given to him.

In the case of Sukhdeo Pathak,8 A goes to the railway station and obtains admission to the platform pretending that he is a C.I.D. officer, without purchasing platform ticket. It was held that A was guilty of cheating.

As regards the ingredient No. 2(a) (ii) mentioned above, i.e., “to consent that any person shall retain property, Morgan and Macpherson in their Indian Penal Code observed that it is equally a cheat whether a deception causes a person fraudulently or dishonestly to acquire property by delivery, or to retain property already in his possession. If a man to whom property is lent or who is entrusted for a time with the charge of it deceives the owner and thereby induces for some purpose of wrongful gain to the borrower or wrongful loss to the

6 (1871) 3 N.W.P. 16.

7 (1948) I.L.R. Mad. 578.

8 (1917) 19 Cr. L.J. 209: 3 P.L.J. 389:A.I.R. 1918 Pat. 653.

owner to allow the property to be retained in the borrower’s possession, this amounts to cheating.9

In the case of Rakma10, a prostitute communicated syphilis to a man who had sexual intercourse with her on the strength of her misrepresentation that she was free from disease; it was held that she committed the offence of cheating. Similarly, in the case of Komul Das,11 the accused passed off girls of a low caste as girls of a higher caste and thus obtained money from persons who married them, it was held that he had cheated.

9 P.382.

10 (1886) I.L.R. 11 Bom. 59.

11 (1865) 2 W.R. (Cr) 7.

C h a p t e r

6

Jurisprudence of the Judicial Proceedings under Section.406 PC

C h a p t e r

6 Jurisprudence of the Judicial Proceedings under Section.406 PC


As it is given in the 3rd Column of Schedule II of CrPC that Criminal Breach of Trust is such an offence in which the police may arrest an offender without any warrant and u/s.4(1)(f) CrPC such an offence for which a police-officer, may arrest without warrant is a cognizable offence. So, the offence in question is a cognizable one.


As per the 4th Column of Schedule II of CrPC ‘warrant’ is the process that shall ordinarily be issued in the first instance in any litigation involving the allegations under any of Sections.406/407/408/409 of the Penal Code.

6.3. Appropriate Trial Court for trying the offences of Criminal Breach of Trust

As per the 8th Column of Schedule II of CrPC litigation involving the allegation under Section.406 of the Penal Code is triable by any Metropolitan Magistrate or Magistrate of the first class or second class.

As per the 8th Column of Schedule II of CrPC litigation involving the allegations under Sections.407/408 of the Penal Code are triable by any Metropolitan Magistrate or Magistrate of the first class.

Again as per the 8th Column of Schedule II of CrPC litigation involving the allegation under Sections.409 of the Penal Code is triable by Court of Session.

The offence of Criminal Breach of Trust may be inquired into or tried by a Court within the local limits of whose jurisdiction any part of the property which is the subject of the offence was received or retained by the accused person, or the offence was committed. The offence cannot be tried at a place where the entrustment nor any act of conversion of the money entrusted took place but where the accused was to account for and deposit the money received and failed to do so, especially when there was nothing to show that the accused had been at the place at any material time(1942 Cal 507)


As per the 7th Column of Schedule II of CrPC S. 406 of the Penal Code speaks of awarding

punishment by a Court with imprisonment of either description for 3 years, or with fine, or

both.


punishment by a Court with imprisonment of either description for 7 years, and with fine.


punishment by a Court with imprisonment of either description for 7 years, and with fine.


punishment by a Court with imprisonment for life or imprisonment of either description for

10 years, and with fine.

But these sections do not empower a Criminal Court to pass an order directing the accused to pay the sale proceeds or a proceeds of a property to the complainant in respect of which the charge of the criminal breach of trust is established against the accused.(41 DLR 4)


As per the 6th Column of Schedule II of CrPC and in accordance with S. 345(2) CrPC the

offences of Criminal Breach of Trust u/SS. 406/407/408 PC are compoundable when

permission is given by the Court before which the prosecution is pending by the owner of the

property in respect of which the breach of trust has been committed.

Since the offences u/SS. 406/407/408 PC are compoundable when permission is given by the

Court before which the prosecution is pending, the abetment of such offences or an attempt to

commit such offence(when such attempt is itself an offence) may be compounded in like

manner.

But as per the 6th Column of Schedule II of CrPC the offence of Criminal Breach of Trust u/S. 409 is not compoundable.


As per the 5th Column of Schedule II of CrPC the offences of Criminal Breach of Trust u/SS. 406/407/408/409 PC are not bailable.

So, here lies the scope of application of the discretionary powers coupled with Judicious application of mind of the Judge presiding the Court. Bail in such offences cannot be claimed as of right. It is a common practice that the courts often enlarge any person accused of these

offences for the purpose of compromise with the complainant. But since a conditional bail is not tenable in the eye of law orders of granting bail for the purpose of compromise should not contain the word ‘condition’ rather the phrase ‘for the purpose of compromise’ is safe to use in the orders of granting bail in such offences.


A Charge is a written document containing the description of the offence which the Court, in an inquiry or trial, finds prima facie proved by evidence before it to have been committed by the accused and requires him to defend it. It is the formulation of specific accusation made against a person in precise language so as to show the nature of the exact accusation to that person at the earlier stage. The term “charge” will include any head of charge when the charge contains more than one head.

In charge of criminal breach of trust, it shall be sufficient to specify the gross sum in respect of which the offence is alleged to have been committed, and the dates between which the offence is alleged to have been committed, without specifying particular items or exact dates, and the charge so framed shall be deemed to be a charge of one offence; provided that the time included between the first and last of such dates shall not exceed one year. Where an accused person is charged with having misappropriated or committed criminal breach of trust in respect of an aggregate sum of money, the whole sum being alleged to have been wrongfully dealt with by the accused within a period not exceeding one year, the mere fact that items composing such aggregate sum are specified and may be more than three in number will not render the charge obnoxious to be prohibition implied by Section 234 of the CrPC. In a charge of three counts, each count specified the sum of money alleged to have been misappropriated by the accused on a particular day; but in two out of three cases the total sum consisted of three separate items in each instance, it was held that a charge so framed did not offend against Section 234 CrPC.

Formal Charge U/S 406 PC goes as under:

I (Magistrate/Judge) hereby charge you(name of accused) as follows:-

That you, on or about the......day of......(or if the property involved is a sum of money) between the ...... day of......and the day of (the time between first and last of such date not being more than one year) at.........being entrusted with certain property, to wit...., committed criminal breach of trust and that you thereby committed an offence under S.406 of the Penal Code, and within my cognizance.

And I hereby direct that you be tried on the said charge.

Date

(.../..../....)

.................................................

(Sign of the Magistrate/Judge)

The charge, after framing in above format, must be read over with explanation the accused persons. If they plead their guilt then u/s.243 CrPC punishment shall have to be pronounced giving them an opportunity for hearing why they should not be punished. But if the accused persons plead that they are not guilty and seek justice witnesses of prosecution side have to be summoned for adducing evidence to substantiate the charge.

For getting the relief by the defence side in the charge stage i.e. discharge of the accused persons a petition u/s.241A on strong and cogent reasons in support of discharge may be preferred before the trial court.


On the matter of Revision in the litigation involving Criminal Breach of Trus t

The provision relating to Revision u/ss.435/436/439/440/442/442A CrPC are relevant in case

of any Revision in the litigation involving Criminal Breach Of Trust.

The relevant provisions regarding revision are as under:

Power to call for records of inferior Courts:

(1) The High Court Division or any Sessions Judge, may call for and examine the record of any proceeding before any inferior Criminal Court situate within the local limits of its or his jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order recorded or passed, and as to the regularity of any proceedings of such inferior Court and may, when calling for such record, direct that the execution of any sentence be suspended and, if the accused is in confinement, that he be released on bail or on his own bond pending the examination of the record. Explanation-All Magistrates, whether Executive or Judicial, shall be deemed to be inferior to the Sessions Judge for the purposes of this sub-section. (Vide Section 435.)

Power to order inquiry: On examining any record under section 435 or otherwise, the High Court Division or the Sessions Judge may direct the Chief Metropolitan Magistrate or Chief Judicial Magistrate by himself or by any of the Magistrates subordinate to him to make, and the Chief Metropolitan Magistrate or Chief Judicial Magistrate may himself make, or direct any Sub-ordinate Magistrate to make, further inquiry into any complaint which has been dismissed under section 203 or sub-section (3) of section 204, or into the case of any person accused of an offence who has been discharged: Provided that no Court shall make any direction under this section for inquiry into the case of any person who has been discharged unless such person has had an opportunity of showing cause why such direction should not be made. (Vide Section 436.)

High Court Division's powers of revision: (1) In the case of any proceeding the record of which has been called for by itself or which has been reported for orders, or which otherwise comes to its knowledge, the High Court Division may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 423, 426, 427 and

428 or on a Court by section 338, and may enhance the sentence; and, when the Judges composing the Court of Revision are equally divided in opinion, the case shall be disposed of in manner provided by section 429. (2) No order under this section shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence. (3) Where the sentence dealt with under this section has been passed by a Magistrate, the Court shall not inflict a greater punishment for the offence which, in the opinion of such Court, the accused has committed than might have been inflicted for such offence by a Metropolitan Magistrate or] a Magistrate of the first class. (4) Nothing in this section shall be deemed to authorize the High Court Division to convert a finding of acquittal into one of conviction, or to entertain any proceedings in revision with respect to an order made by the Sessions Judge under section 439A]. (5) Where under this Code an appeal lies and no appeal is brought, no proceedings by way of revision shall be entertained at the instance of the party who could have appealed. (6) Notwithstanding anything contained in this section, any convicted person to whom an opportunity has been given under sub-section (2) of showing cause why his sentence should not be enhanced shall, in showing cause, be entitled also to show cause against his conviction. (Vide Section 439.)

Optional with Court to hear parties: No party has any right to be heard either personally or by pleader before any Court when exercising its powers of revision: Provided that the Court may, if it thinks fit, when exercising such powers, hear any party either personally or by pleader, and that nothing in this section shall be deemed to affect section 439, sub-section (2). (Vide Section 440.)

High Court Division's order to be certified to lower Court or Magistrate: When a case is revised under this Chapter by the High Court Division, it shall, in manner hereinbefore provided by section 425, certify its decision or order to the Court by which the finding, sentence or order revised was recorded or passed, and the Court or Magistrate to which the decision or order is so certified shall thereupon make such orders as are conformable to the decision so certified; and, if necessary, the record shall be amended in accordance therewith. (Vide Section 442.) Time for disposal of appeals and Revision: (1) An Appellate Court shall dispose of an appeal filed before it within ninety days from the date of service of notice upon respondents. (2) A Court having power of revision shall dispose of a proceeding in revision within ninety days from the date of service of notice upon the parties.

(3) In this section, in determining the time, only the working days shall be counted.(Vide Section 442A.)

On the matter of Appeal in the litigation involving Criminal Breach of Trus t

The provision relating to Appeal

u/ss.407/408/410/412/413/415A/417/417A/418/419/420/421/426/427/428/429/430/431 CrPC

are relevant in case of any Appeal in the litigation involving Criminal Breach of Trust.

The relevant provisions regarding appeal are as under:

Appeal from sentence of Magistrate of the second or third class Transfer of appeals to

Additional Chief Judicial Magistrate –

Any person convicted on a trial held by any Magistrate of the second or third class may appeal to the

chief Judicial Magistrate who may himself hear and dispose of the appeal or transfer it to an

Additional Chief Judicial Magistrate for disposal, and may withdraw an appeal so transferred. (Vide

S.407.)

Appeals from sentence of Joint Sessions Judge and Magistrates of the first class.- Any person convicted on a trial held by a Joint Sessions Judge, Metropolitan Magistrate or any Judicial Magistrate of the first class, may appeal to the Sessions Judge: Provided as Follows : (a)When in any case a Joint Sessions Judge passes any sentence of imprisonment for a term exceeding five years, the appeal of all or any of the convicted persons shall lie to the High Court Division; (b)When any person is convicted by a Metropolitan Magistrate or Judicial Magistrate specially empowered to try an offence under section 124A of the Penal Code, the appeal shall lie to the High Court Division. (Vide S.408.) Appeal from sentence of Court of Session Any person convicted on a trial held by a Sessions Judge, or an Additional Sessions Judge, may appeal to the High Court Division. (Vide S.410.)

No appeal in certain cases when accused pleads guilty Notwithstanding anything hereinbefore contained where an accused person has pleaded guilty and has been convicted by a Court of Session or any Metropolitan Magistrate or Magistrate of the first class on such plea, there shall be no appeal except as to the extent or legality of the sentence. (Vide S.412.)

No appeal in petty cases

Notwithstanding anything hereinbefore contained, there shall be no appeal by a convicted person in cases in which a Court of Session passes a sentence of imprisonment not exceeding one month only, or in which a Court of Session or Chief Judicial Magistrate] or Metropolitan Magistrate] or other Magistrate of the first class passes a sentence of fine not exceeding fifty Taka only.

Explanation- There is no appeal from a sentence of imprisonment passed by such Court or Magistrate in default of payment of fine when no substantive sentence of imprisonment has also been passed. (Vide S.413.)

Special right of appeal in certain cases

Notwithstanding anything contained in this Chapter, when more persons than one are convicted in one trial, and an appealable judgment or order has been passed in respect of any of such persons, all or any of the persons convicted at such trial shall have a right of appeal. (Vide S.415A.)

Appeal in case of acquittal

(1) Subject to the provisions of sub-section (4), the Government may, in any case, direct the Public Prosecutor to present an appeal- (a) to the High Court Division from an original or appellate Order of acquittal passed by any Court of Session; (b) to the Court of Session from an original or appellate Order of acquittal passed by any Magistrate.

(2) Notwithstanding anything contained in section 418, if such an order is passed in any case instituted upon complaint, and if the order involves an error of law occasioning failure of justice, the complainant may present an appeal- (a) to the High Court Division from an original order of acquittal passed by any Court of Session; (b) to the Court of Session from an original order of acquittal passed by any Magistrate. (3) No appeal by the complaint from an order of acquittal shall be entertained by the High Court Division or a Court of Session] after the expiry of sixty days from the date of the order of acquittal. (4) If, in any case, the admission of an appeal from an order of acquittal is refused, no appeal from that order of acquittal shall lie under sub-section (1). (Vide S.417.)

Appeal against inadequacy of sentence (1) The Government may, in any case of conviction on a trial held by any court, direct the Public Prosecutor to present an appeal to the High Court Division against the sentence on the ground of its inadequacy. (2) A complainant may, in any case of conviction on a trial held by any Court, present an appeal to the Appellate Court against the sentence on the ground of its inadequacy: Provided that no appeal under this sub-section shall be entertained by the Appellate Court after the expiry of sixty days from the date of conviction. (3) When an appeal has been filed against the sentence on the ground of its inadequacy, the Appellate Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause, the accused may plead for his acquittal or for the reduction of the sentence. (Vide S.417A.)

Appeals on what matters admissible An appeal may lie on a matter of fact as well as a matter of law. Explanation-The alleged severity of a sentence shall, for the purposes of this section, be deemed to be a matter of law. (Vide S.418.)

Petition of appeal

Every appeal shall be made in the form of a petition in writing presented by the appellant or his pleader, and every such petition shall (unless the Court to which it is presented otherwise directs) be accompanied by a copy of the judgment or order appealed against. (Vide S.419.)

Procedure when appellant in jail If the appellant is in jail, he may present his petition of appeal and the copies accompanying the same to the officer in charge of the jail, who shall thereupon forward such petition and copies to the proper Appellate Court. (Vide S.420.) Summary dismissal of appeal (1) On receiving the petition and copy under section 419 or section 420, the Appellate Court shall pursue the same, and, if it considers that there is no sufficient ground for interfering, it may dismiss the appeal summarily: Provided that no appeal presented under section 419 shall be dismissed unless the appellant or his pleader has had a reasonable opportunity of being heard in support of the same. (2) Before dismissing an appeal under this section, the Court may call for the record of the case, but shall not be bound to do so. (Vide S.421.)

Suspension of sentence pending appeal Release of appellant on bail (1) Pending any appeal by a convicted person, the Appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in confinement, that he be released on bail or on his own bond. (2) The power conferred by this section on an Appellate Court may be exercised also by the High Court Division in the case of any appeal by a convicted person to a Court subordinate thereto. (2A) When any person is sentenced to imprisonment for a term not exceeding one year by a Court, and an appeal lies from that sentence, the Court may, if the convicted person satisfies the Court that he intends to present an appeal, order that he be released on bail for a period sufficient in the opinion of the Court to enable him to present the appeal and obtain the orders of the Appellate Court under sub-section (1) and the sentence of imprisonment shall, so long as he is so released on bail, be deemed to be suspended. (2B) Where High Court Division is satisfied that a convicted person has been granted special leave to appeal to the Appellate Division of the Supreme Court] against any sentence which it has imposed or maintained, it may if it so thinks fit order that pending the appeal the sentence or order appealed against be suspended, and also, if the said person is in confinement, that he be released on bail. (3) When the appellant is ultimately sentenced to imprisonment, or transportation, the time during which he is so released shall be excluded in computing the term for which he is so sentenced. (Vide S.426.)

Arrest of accused in appeal from acquittal When an appeal is presented under section 417 or section 417A, the High Court Division or any other Appellate Court, as the case may be, issue a warrant directing that the accused be arrested and brought before it or any subordinate Court, and the Court before which he is brought may commit him to prison pending the disposal of the appeal, or admit him to bail. (Vide S.427.)

Appellate Court may take further evidence or direct it to be taken (1) In dealing with any appeal under this Chapter, the Appellate Court, if it thinks additional evidence to be necessary, shall record its reasons, and may either take such evidence itself, or direct it to be taken by a Magistrate, or, when the Appellate Court is High Court Division, by a Court of Session or a Magistrate. (2) When the additional evidence is taken by the Court of Session or the Magistrate, it or he shall certify such evidence to the Appellate Court, and such Court shall thereupon proceed to dispose of the appeal. (3) Unless the Appellate Court otherwise directs, the accused or his pleader shall be present when the additional evidence is taken. (4) The taking of evidence under this section shall be subject to the provisions of Chapter XXV, as if it were an inquiry. (Vide S.428.)

Procedure where Judges of Court of Appeal are equally divided

When the Judges composing the Court of Appeal are equally divided in opinion, the case, with their opinions thereon, shall be laid before another Judge of the same Court, and such Judge, after such hearing (if any) as he thinks fit, shall deliver his opinion, and the judgment or order shall follow such opinion. (Vide S. 429.)

Finality of orders on appeal Judgments and orders passed by an Appellate Court upon appeal shall be final, except in the cases provided for in section 417, section 417A and Chapter XXXII. (Vide S.430.) Abatement of appeals Every appeal under section 417 or section 417A shall finally abate on the death of the accused, and every other appeal under this Chapter (except an appeal from a sentence of fine) shall finally abate on the death of the appellant. (Vide S.431.)

C h a p t e r


C h a p t e r



As it is given in the 3rd Column of Schedule II of CrPC that Cheating(u/ss.419/420) are such

offences in which the police may arrest an offender without any warrant and u/s.4(1)(f) CrPC

such offences for which a police-officer, may arrest without warrant is cognizable offences.

So, the offences in question are cognizable offences. On the contrary offences of cheating

u/ss.417 and 418 are non-cognizable offences.


As per the 4th Column of Schedule II of CrPC ‘warrant’ is the process that shall ordinarily be

issued in the first instance in any litigation involving the allegations of Cheating under any of

Sections.417/418/419/420 of the Penal Code.


As per the 8th Column of Schedule II of CrPC litigation involving the allegations of Cheating under Sections.417/418/419 of the Penal Code are triable by any Metropolitan Magistrate or Magistrate of the first class or second class.

Again as per the 8th Column of Schedule II of CrPC litigation involving the allegation of cheating under Section.420 of the Penal Code is triable by any Metropolitan Magistrate or Magistrate of the first class.




both.



both.



both.


punishment by a Court with imprisonment for life or imprisonment of either description for 7

years, and with fine.



offences of Cheating u/SS. 417/418/419/420 PC are compoundable when permission is given

by the Court before which the prosecution is pending by the person cheated.

Since the offences u/SS. 417/418/419/420 PC are compoundable when permission is given by

the Court before which the prosecution is pending, the abetment of such offences or an

attempt to commit such offence(when such attempt is itself an offence) may be compounded

in like manner.


As per the 5th Column of Schedule II of CrPC the offences of Cheating u/SS. 417/418/419/420 PC are bailable.

So, here lies the scope of application for granting the bail before the presiding the Court as of right by the accused person. Hence, bail in such offences can be claimed as of right and the Courts always consider such matter positively.



Formal Charge U/S 420PC goes as under:

I (Magistrate/Judge) hereby charge you(name of accused) as follows:-

That you, on or about the......day of......(month and year) at(place of commission of offence)......... cheated XY by deceiving him by fraudulently(or dishonestly) inducing him to

deliver certain property 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, committed cheating and that you thereby committed an offence under S.420 of the Penal Code and within the cognizance of this Court.

And I hereby direct that you be tried on the said charge.

Date

(.../..../....)

.................................................

(Sign of the Magistrate/Judge)

The charge, after framing in above format, must be read over with explanation the accused persons. If they plead their guilt then u/s.243 CrPC punishment shall have to be pronounced giving them an opportunity for hearing why they should not be punished. But if the accused persons plead that they are not guilty and seek justice witnesses of prosecution side have to be summoned for adducing evidence to substantiate the charge.

For getting the relief by the defence side in the charge stage i.e. discharge of the accused persons a petition u/s.241A on strong and cogent reasons in support of discharge may be preferred before the trial court.


On the matter of Revision in the litigation involving Cheating


of any Revision in the litigation involving Cheating.




Power to order inquiry: On examining any record under section 435 or otherwise, the High Court Division or the Sessions Judge may direct the Chief Metropolitan Magistrate or Chief Judicial Magistrate by himself or by any of the Magistrates subordinate to him to make, and the Chief Metropolitan Magistrate or Chief Judicial Magistrate may himself make, or direct any Sub-ordinate Magistrate to make, further inquiry

into any complaint which has been dismissed under section 203 or sub-section (3) of section 204, or into the case of any person accused of an offence who has been discharged: Provided that no Court shall make any direction under this section for inquiry into the case of any person who has been discharged unless such person has had an opportunity of showing cause why such direction should not be made. (Vide Section 436.)

High Court Division's powers of revision: (1) In the case of any proceeding the record of which has been called for by itself or which has been reported for orders, or which otherwise comes to its knowledge, the High Court Division may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 423, 426, 427 and 428 or on a Court by section 338, and may enhance the sentence; and, when the Judges composing the Court of Revision are equally divided in opinion, the case shall be disposed of in manner provided by section 429. (2) No order under this section shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence. (3) Where the sentence dealt with under this section has been passed by a Magistrate, the Court shall not inflict a greater punishment for the offence which, in the opinion of such Court, the accused has committed than might have been inflicted for such offence by a Metropolitan Magistrate or] a Magistrate of the first class. (4) Nothing in this section shall be deemed to authorize the High Court Division to convert a finding of acquittal into one of conviction, or to entertain any proceedings in revision with respect to an order made by the Sessions Judge under section 439A]. (5) Where under this Code an appeal lies and no appeal is brought, no proceedings by way of revision shall be entertained at the instance of the party who could have appealed. (6) Notwithstanding anything contained in this section, any convicted person to whom an opportunity has been given under sub-section (2) of showing cause why his sentence should not be enhanced shall, in showing cause, be entitled also to show cause against his conviction. (Vide Section 439.)

Optional with Court to hear parties: No party has any right to be heard either personally or by pleader before any Court when exercising its powers of revision: Provided that the Court may, if it thinks fit, when exercising such powers, hear any party either personally or by pleader, and that nothing in this section shall be deemed to affect section 439, sub-section (2). (Vide Section 440.)

High Court Division's order to be certified to lower Court or Magistrate: When a case is revised under this Chapter by the High Court Division, it shall, in manner hereinbefore provided by section 425, certify its decision or order to the Court by which the finding, sentence or

order revised was recorded or passed, and the Court or Magistrate to which the decision or order is so certified shall thereupon make such orders as are conformable to the decision so certified; and, if necessary, the record shall be amended in accordance therewith. (Vide Section 442.) Time for disposal of appeals and Revision: (1) An Appellate Court shall dispose of an appeal filed before it within ninety days from the date of service of notice upon respondents. (2) A Court having power of revision shall dispose of a proceeding in revision within ninety days from the date of service of notice upon the parties. (3) In this section, in determining the time, only the working days shall be counted.(Vide Section 442A.)

On the matter of Appeal in the litigation involving Cheating


u/ss.407/408/410/412/413/415A/417/417A/418/419/420/421/426/427/428/429/430/431 CrPC

are relevant in case of any Appeal in the litigation involving Cheating.







S.407.)




Notwithstanding anything hereinbefore contained, there shall be no appeal by a convicted person in cases in which a Court of Session passes a sentence of imprisonment not exceeding one month only, or in which a Court of Session or Chief Judicial Magistrate] or Metropolitan Magistrate] or other Magistrate of the first class passes a sentence of fine not exceeding fifty Taka only. Explanation- There is no appeal from a sentence of imprisonment passed by such Court or Magistrate in default of payment of fine when no substantive sentence of imprisonment has also been passed. (Vide S.413.)






Appeal against inadequacy of sentence (1) The Government may, in any case of conviction on a trial held by any court, direct the Public Prosecutor to present an appeal to the High Court Division against the sentence on the ground of its inadequacy.

(2) A complainant may, in any case of conviction on a trial held by any Court, present an appeal to the Appellate Court against the sentence on the ground of its inadequacy: Provided that no appeal under this sub-section shall be entertained by the Appellate Court after the expiry of sixty days from the date of conviction. (3) When an appeal has been filed against the sentence on the ground of its inadequacy, the Appellate Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause, the accused may plead for his acquittal or for the reduction of the sentence. (Vide S.417A.) Appeals on what matters admissible An appeal may lie on a matter of fact as well as a matter of law. Explanation-The alleged severity of a sentence shall, for the purposes of this section, be deemed to be a matter of law. (Vide S.418.)

Petition of appeal



Suspension of sentence pending appeal Release of appellant on bail (1) Pending any appeal by a convicted person, the Appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in confinement, that he be released on bail or on his own bond. (2) The power conferred by this section on an Appellate Court may be exercised also by the High Court Division in the case of any appeal by a convicted person to a Court subordinate thereto. (2A) When any person is sentenced to imprisonment for a term not exceeding one year by a Court, and an appeal lies from that sentence, the Court may, if the convicted person satisfies the Court that he intends to present an appeal, order that he be released on bail for a period sufficient in the opinion of the Court to enable him to present the appeal and obtain the orders of the Appellate Court under sub-section (1) and the sentence of imprisonment shall, so long as he is so released on bail, be deemed to be suspended.

(2B) Where High Court Division is satisfied that a convicted person has been granted special leave to appeal to the Appellate Division of the Supreme Court] against any sentence which it has imposed or maintained, it may if it so thinks fit order that pending the appeal the sentence or order appealed against be suspended, and also, if the said person is in confinement, that he be released on bail. (3) When the appellant is ultimately sentenced to imprisonment, or transportation, the time during which he is so released shall be excluded in computing the term for which he is so sentenced. (Vide S.426.)





Finality of orders on appeal Judgments and orders passed by an Appellate Court upon appeal shall be final, except in the cases provided for in section 417, section 417A and Chapter XXXII. (Vide S.430.)

Abatement of appeals Every appeal under section 417 or section 417A shall finally abate on the death of the accused, and every other appeal under this Chapter (except an appeal from a sentence of fine) shall finally abate on the death of the appellant. (Vide S.431.)

C h a p t e r

8 Jurisprudence of the Judicial Proceedings under Sections. 406/420 PC

C h a p t e r

8 Jurisprudence of the Judicial Proceedings under Sections. 406/420 PC


In case of Judicial Proceeding u/ss.406/420 at the cognizance stage the Court has to scrutinize

in the fact of the case to detect the ingredients of the offences of Criminal Breach of Trust

and Cheating. The Penal Code, 1860 as one of the cardinal substantive criminal law in the

criminal justice system of Bangladesh has created inter alia the offences of Criminal Breach

of Trust and Cheating. The Code has also prescribed the quantum of punishments for the

overt act or covert act committed in the commission of such offences. Sometimes

circumstances arises when the litigations u/SS. 406/420 PC brought before the Criminal

Courts involves such claims which are purely of civil nature and the relief the litigants seek

through such complaint could easily be sought to a competent Civil Court having jurisdiction

on the subject matter. Litigations u/SS.406/420 PC , if proven to be groundless, frivolous and

vexatious then it must be disposed of negatively within the framework of relevant provisions

of Procedural Laws. But dismissal of such complaints should be made with sufficient reasons

to be recorded in the Judicial orders. Nevertheless when litigations brought u/SS.406/420 PC

involves claims of both the civil and the criminal nature in a amalgamated format and on a

multifaceted fact then the Criminal Courts have to deal the matter very cautiously in a

systematic judicial approach. It is observed widely that cent percent litigations brought

u/SS.406/420 PC involves allegations of Cheating only and those are manifestly devoid of

having within it any ingredients of the offence of Criminal Breach of Trust. So, a keen

inquiry and analysis is obvious in detecting the actual nature of allegations brought in the

dress of litigations u/SS.406/420 PC.

Sometimes Cheque Dishonor litigations are filed under SS.406/420 in lieu of filing under

S.138 of NI Act. The reason is that Cheque Dishonor litigations have been brought before the

Courts under SS.406/420 in a situation when the statutory limitation period for filing a case

under S.138 of NI Act elapse.

The offence of Criminal Breach of Trust u/s.406 is a cognizable offence so is the offence of

cheating u/s.420 PC. That is why in this type of case the police can arrest any offender

without the warrant of the Court.


As per the 4th Column of Schedule II of CrPC ‘warrant’ is the process that shall ordinarily be

issued in the first instance in any litigation involving the allegations under any of

Sections.406/420 of the Penal Code.


As per the 8th Column of Schedule II of CrPC litigation involving the allegation under Section.406 of the Penal Code is triable by any Metropolitan Magistrate or Magistrate of the first class or second class.

Again as per the 8th Column of Schedule II of CrPC litigation involving the allegation of cheating under Section.420 of the Penal Code is triable by any Metropolitan Magistrate or Magistrate of the first class.

So, any litigation involving the allegations under both of the Sections.406/420 of the Penal Code is triable by any Metropolitan Magistrate or Magistrate of the first class.




both.


punishment by a Court with imprisonment for life or imprisonment of either description for 7

years, and with fine.

So, in sentencing an offender for any proven charge u/ss.406/420 there lies the scope of application of the discretionary powers coupled with Judicious application of mind of the Judge presiding the Court.



offence of Criminal Breach of Trust u/S. 406 is compoundable when permission is given by

the Court before which the prosecution is pending by the owner of the property in respect of

which the breach of trust has been committed.

And as per the 6th Column of Schedule II of CrPC and in accordance with S. 345(2) CrPC

the offence of Cheating u/S.420 PC is compoundable when permission is given by the Court

before which the prosecution is pending by the person cheated.

So, any litigation involving the allegations under both of the Sections.406/420 of the Penal

Code is compoundable when permission is given by the Court before which the prosecution

is pending either by the owner of the property in respect of which the breach of trust has been

committed or by the person cheated.


As per the 5th Column of Schedule II of CrPC the offence of Criminal Breach of Trust u/S. 406 PC is not bailable.

So, here lies the scope of application of the discretionary powers coupled with Judicious

application of mind of the Judge presiding the Court. Bail in such offences cannot be claimed

as of right.

On the contrary, as per the 5th Column of Schedule II of CrPC the offence of Cheating u/S. 420 PC is bailable.

So, here lies the scope of application for granting the bail before the presiding the Court as of

right by the accused person.

Therefore, in any litigation involving the allegations under both of the Sections.406/420 of the Penal Code if there exists specific allegation of Criminal Breach of Trust against accused persons then bail in such case cannot be claimed as of right. It is a common practice that the courts often enlarge any person accused of these type of cases for the purpose of compromise with the complainant/informant. But since a conditional bail is not tenable in the eye of law orders of granting bail for the purpose of compromise should not contain the word ‘condition’ rather the phrase ‘for the purpose of compromise’ is safe to use in the orders of granting bail in such instances.



In charge of criminal breach of trust, it shall be sufficient to specify the gross sum in respect of which the offence is alleged to have been committed, and the dates between which the offence is alleged to have been committed, without specifying particular items or exact dates, and the charge so framed shall be deemed to be a charge of one offence; provided that the time included between the first and last of such dates shall not exceed one year. The charge, after framing in prescribed format, must be read over with explanation the accused persons. If they plead their guilt then u/s.243 CrPC punishment shall have to be pronounced giving them an opportunity for hearing why they should not be punished. But if the accused persons plead that they are not guilty and seek justice witnesses of prosecution side have to be summoned for adducing evidence to substantiate the charge.

For getting the relief by the defence side in the charge stage i.e. discharge of the accused persons a petition u/s.241A on strong and cogent reasons in support of discharge may be preferred before the trial court. In such cases, at the time of charge framing , prayer for discharge is filed mainly on the grounds inter alia-

� that transaction between the parties is a business transaction or a plain transaction of loan,

� that there was no initial intention of deception,

� that there was no actual delivery of property in pursuant to dishonest inducement,

� that the liability, if any, is nothing but a civil liability,

� that there was no entrustment etc.

In a case cited in 42 DLR (AD) 240 the Appellate Division of Hon’ble Supreme Court of Bangladesh held :

“We are convinced with the merit of the submission that the alleged amount said to have fallen due to the complainant having accrued in course of a long business transaction, the whole allegation in the petition of complaint, even if true, cannot form the basis of any criminal proceeding, much less for cheating, for, the alleged liability incurred is essentially civil in nature. To hold otherwise would be to ignore the realities of business transactions and to encourage civil claims to be brought into criminal courts under some contrivance for the purpose of putting pressure for re-payment of alleged dues which necessarily got to be settled and sorted out in the civil court.”

So, as per the abovementioned case law it is clear that if any amount is due as a result of any

long business transaction, no charge can be framed under sections 406/420 of the Penal Code.

If the transaction is a loan then normally it will be a civil liability unless there is any

allegation of any inducement or false representation.

In cases cited in 49 DLR (AD) 132 and 55 DLR (AD) 58 the Appellate Division of Hon’ble Supreme Court of Bangladesh held :

“There is no bar as to initiation of a criminal case if a civil suit is pending on the self same

fact.”

Furthermore, in case of loan, no charge can be framed under sections 406/420 of the Penal

Code if no promise is made to return money within specified time and there exists no

allegation of inducement at the time of taking loan.(vide 9 BLT 417 and 6 BLC 450)

On the question of liability: Civil or Criminal?

It is also a settled principle of law that if the transaction is a business transaction, there is no

criminal liability, it will be a civil liability if any payment due is not made.( vide 19 BLD

(AD) 128 paragraph 9, 4 BLC (AD) 167 and 15 BLC 29.

But if there is any specific promise of making any payment within a specific time, failure to

make the payment will be considered to be an offence under section 420 of the Penal Code

and charge is to be framed against the accused under that section.

In cases cited in 46 DLR (AD) 180 and 52 DLR 530 it was held :

“Here, the complainant’s case is that he, in good faith, delivered the Jute on the accused’s

inducement of part payment and specific promise to pay the balance amount within three

days. From what has been alleged in the complaint it cannot be said that there was no prima

facie case against the accused.”

But if there is no allegation of specific promise for making payment within a specific time,

failure to pay the amount will not be a criminal liability but will be a civil liability and as

such no charge can be framed. If any amount is due after accounting, in that case also, there

will be no criminal liability.(vide 42 DLR (AD) 240, 13 BLD (AD) 28, 10 BCR (AD) 287).

A transaction may be a business transaction or purely transaction of loan and if there is any

refusal to pay the amount due, but if the accused denies the transaction or totally denies to

pay any amount, then the offence of cheating will be attracted and the liability will not be a

civil liability.

In a case cited in 43 DLR (AD) 173 it was held :

“Since, according to the petition of complaint, the accused petitioner totally denies receipt of any sum from the complainant respondent the question of civil liability does not arise.”

But in another case when there was no allegation that the accused denied that he would not

pay the balance amount and there was no allegation of initial deception, the Appellate

Division approved the order of quashment of the proceeding passed by the High Court

Division.(Vide 50 DLR (AD) 163).

In most of the cases relating to offences under 406/420, the defence is taken by arguing that

the liability is a civil liability. At the time of framing charge it may not be possible to

determine whether the liability is purely a civil liability or not. On this point the observations

made by Appellate Division in the case of Rustom Ali Mataubbar Vs. M. Salahuddin and

others reported in 7 BLT (AD) 132 are relevant. The observations are:

“It will depend on the allegations that are made in the criminal Court in respect of the

transaction which is prima facie of a civil nature. A transaction may be of civil nature but by

reason of the allegations made in a particular case there may also appear elements/ingredients

of criminality in the transaction. In the instant case the complainant has specifically alleged

that the accused had fraudulently deceived him and thereby misappropriated TK.5,00,000/-

.....It will be for the complainant to prove his allegations by evidence at the trial.”

From the observations made in the decision referred above, it is clear that at the time of

framing charge, the allegations made are to be taken into consideration and if such allegations

attract the offences under section 406/420, charge is to be framed under those sections.

On the question of existence of initial intention to deceive

In certain cases, the defence takes the plea that as there is no initial intention of deception, no

charge under section 420 can be framed. It is true that there are several decisions wherein it

has been held that unless there is any allegation of initial deception, no charge under section

420 can be framed. But in some other decisions it has been held that whether there was any

initial deception or not, is to be gathered from the surrounding circumstances which may be

judged by the subsequent conduct of the accused.(vide 27 DLR (AD) 175, 46 DLR (AD) 180,

14 BLD (AD) 78, 48 DLR (AD) 100, 6 ADC 165 and 434, 49 DLR 464 & 45 DLR 102).

The question whether there was any initial intention of deception or not being a question of

fact can be decided only at the time of trial. That is why in large number of decisions it has

been held that the fact may be ascertained from all the surrounded circumstances and

subsequent conduct of the accused. This is evident from illustration (f)to section 415 PC. A

clever person may conceal his intention at the time of taking the loan though he actually

intended not to repay the same. It may happen that by his subsequent conduct he may expose

himself.

From the case of Nurul Islam Vs. State reported in 49 DLR 464, it appears that the accused

through clever means took the money but subsequently when demand was made to refund the

money, the accused threatened to murder the informant. From this conduct of the accused it

is clear that the accused had initial intention to deceive though he concealed such intention.

On the question of entrustment

In order to frame charge under section 406, the Court is to see whether there is any allegation

of entrustment of any property and whether that property was misappropriated or converted

for the own use of the accused or was used in a manner in violation of any direction of law.

Main two ingredients of the offence are-

i) entrustment of the property

ii) dishonest misappropriation of that property.

Entrustment means giving of dominion of a property to a person for sometime or some

specific purpose. Dominion of the property may be given in pursuance to a contract. If the

property so entrusted, is used by the accused for his own benefit in violation of the terms of

the contract, such an act will amount to breach of trust, It has been held in the case of

Shamsul Alam Vs. A.F.R. Hassan reported in 40 DLR 46, that the word “entrustment” as

used in section 405 connotes that the accused holds the property in fiduciary capacity.

When issue of ‘transaction of loan’ attracts the offence u/s.406 PC

In a case cited in 2 MLR (AD) 253 a decision came in this context. In that case, the accused

persons took a loan of BDT. 3,00,000/- from a bank for the purpose of manufacturing bricks

after mortgaging bricks, manufacturing machineries and 50% of the burnt bricks with the

bank as security for the loan but the accused persons sold the bricks and also removed the

mortgaged properties. In this case, the main argument was that the liability was a civil

liability and on such ground the accused persons moved to the High Court Division for

quashing of the proceeding but the High Court Division refused. Then the accused persons

moved to the Appellate Division by filing a leave petition which was dismissed mainly on the

consideration of fact that the accused persons sold/removed the mortgaged properties which

were kept in their custody by the Bank.

In the above cited case, though the transaction was a loan but the properties were entrusted to

the loanee and as those were sold/removed, the act attracted the offence of section 406 of the

Penal Code.

In another case, the accused purchased two trucks with the loan sanctioned by a bank under

an agreement that those would not be transferred before repayment of the loan. But the

accused person sold the trucks in violation of the terms of that agreement. In this case also the

High Court Division refused to quash the proceeding and the Appellate Division dismissed

the petition for leave to appeal.(vide 5 MLR (AD) 320, 11 BLT (AD) 128 and 8 MLR (AD)

39)

Inability to pay back entrusted money: whether attracts S.406 PC

In a case cited in 13 BLD 85 and 15 BLC 29 it was held that inability to pay back a sum of

money entrusted to a person will not amount to a Criminal Breach of Trust.


On the matter of Revision in the litigation involving Criminal Breach of Trus t & Cheating


of any Revision in the litigation involving Criminal Breach of Trust & Cheating.




Power to order inquiry: On examining any record under section 435 or otherwise, the High Court Division or the Sessions Judge may direct the Chief Metropolitan Magistrate or Chief Judicial Magistrate by himself or by any of the Magistrates subordinate to him to make, and the Chief Metropolitan Magistrate or Chief Judicial Magistrate may himself make, or direct any Sub-ordinate Magistrate to make, further inquiry into any complaint which has been dismissed under section 203 or sub-section (3) of section 204, or into the case of any person accused of an offence who has been discharged:

Provided that no Court shall make any direction under this section for inquiry into the case of any person who has been discharged unless such person has had an opportunity of showing cause why such direction should not be made. (Vide Section 436.)

High Court Division's powers of revision: (1) In the case of any proceeding the record of which has been called for by itself or which has been reported for orders, or which otherwise comes to its knowledge, the High Court Division may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 423, 426, 427 and 428 or on a Court by section 338, and may enhance the sentence; and, when the Judges composing the Court of Revision are equally divided in opinion, the case shall be disposed of in manner provided by section 429. (2) No order under this section shall be made to the prejudice of the accused unless he has had an opportunity of being heard either personally or by pleader in his own defence. (3) Where the sentence dealt with under this section has been passed by a Magistrate, the Court shall not inflict a greater punishment for the offence which, in the opinion of such Court, the accused has committed than might have been inflicted for such offence by a Metropolitan Magistrate or] a Magistrate of the first class. (4) Nothing in this section shall be deemed to authorize the High Court Division to convert a finding of acquittal into one of conviction, or to entertain any proceedings in revision with respect to an order made by the Sessions Judge under section 439A]. (5) Where under this Code an appeal lies and no appeal is brought, no proceedings by way of revision shall be entertained at the instance of the party who could have appealed. (6) Notwithstanding anything contained in this section, any convicted person to whom an opportunity has been given under sub-section (2) of showing cause why his sentence should not be enhanced shall, in showing cause, be entitled also to show cause against his conviction. (Vide Section 439.) Optional with Court to hear parties: No party has any right to be heard either personally or by pleader before any Court when exercising its powers of revision: Provided that the Court may, if it thinks fit, when exercising such powers, hear any party either personally or by pleader, and that nothing in this section shall be deemed to affect section 439, sub-section (2). (Vide Section 440.)

High Court Division's order to be certified to lower Court or Magistrate: When a case is revised under this Chapter by the High Court Division, it shall, in manner hereinbefore provided by section 425, certify its decision or order to the Court by which the finding, sentence or order revised was recorded or passed, and the Court or Magistrate to which the decision or order is so certified shall thereupon make such orders as are conformable to the decision so certified; and, if necessary, the record shall be amended in accordance therewith. (Vide Section 442.)

Time for disposal of appeals and Revision: (1) An Appellate Court shall dispose of an appeal filed before it within ninety days from the date of service of notice upon respondents. (2) A Court having power of revision shall dispose of a proceeding in revision within ninety days from the date of service of notice upon the parties. (3) In this section, in determining the time, only the working days shall be counted.(Vide Section 442A.)

On the matter of Appeal in the litigation involving Criminal Breach of Trus t & Cheating


u/ss.407/408/410/412/413/415A/417/417A/418/419/420/421/426/427/428/429/430/431 CrPC

are relevant in case of any Appeal in the litigation involving Criminal Breach of Trust &

Cheating.







S.407.)




Notwithstanding anything hereinbefore contained, there shall be no appeal by a convicted person in cases in which a Court of Session passes a sentence of imprisonment not exceeding one month only, or in which a Court of Session or Chief Judicial Magistrate] or Metropolitan Magistrate] or other Magistrate of the first class passes a sentence of fine not exceeding fifty Taka only. Explanation- There is no appeal from a sentence of imprisonment passed by such Court or Magistrate in default of payment of fine when no substantive sentence of imprisonment has also been passed. (Vide S.413.)






Appeal against inadequacy of sentence (1) The Government may, in any case of conviction on a trial held by any court, direct the Public Prosecutor to present an appeal to the High Court Division against the sentence on the ground of its inadequacy.

(2) A complainant may, in any case of conviction on a trial held by any Court, present an appeal to the Appellate Court against the sentence on the ground of its inadequacy: Provided that no appeal under this sub-section shall be entertained by the Appellate Court after the expiry of sixty days from the date of conviction. (3) When an appeal has been filed against the sentence on the ground of its inadequacy, the Appellate Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause, the accused may plead for his acquittal or for the reduction of the sentence. (Vide S.417A.) Appeals on what matters admissible An appeal may lie on a matter of fact as well as a matter of law. Explanation-The alleged severity of a sentence shall, for the purposes of this section, be deemed to be a matter of law. (Vide S.418.)

Petition of appeal



Suspension of sentence pending appeal Release of appellant on bail (1) Pending any appeal by a convicted person, the Appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in confinement, that he be released on bail or on his own bond. (2) The power conferred by this section on an Appellate Court may be exercised also by the High Court Division in the case of any appeal by a convicted person to a Court subordinate thereto. (2A) When any person is sentenced to imprisonment for a term not exceeding one year by a Court, and an appeal lies from that sentence, the Court may, if the convicted person satisfies the Court that he intends to present an appeal, order that he be released on bail for a period sufficient in the opinion of the Court to enable him to present the appeal and obtain the orders of the Appellate Court under

sub-section (1) and the sentence of imprisonment shall, so long as he is so released on bail, be deemed to be suspended. (2B) Where High Court Division is satisfied that a convicted person has been granted special leave to appeal to the Appellate Division of the Supreme Court] against any sentence which it has imposed or maintained, it may if it so thinks fit order that pending the appeal the sentence or order appealed against be suspended, and also, if the said person is in confinement, that he be released on bail. (3) When the appellant is ultimately sentenced to imprisonment, or transportation, the time during which he is so released shall be excluded in computing the term for which he is so sentenced. (Vide S.426.)





Finality of orders on appeal Judgments and orders passed by an Appellate Court upon appeal shall be final, except in the cases provided for in section 417, section 417A and Chapter XXXII. (Vide S.430.)

Abatement of appeals Every appeal under section 417 or section 417A shall finally abate on the death of the accused, and every other appeal under this Chapter (except an appeal from a sentence of fine) shall finally abate on the death of the appellant. (Vide S.431.)

C h a p t e r

9 Case laws on the matters of Criminal Breach of Trust and allied

offences

C h a p t e r

9 Case laws on the matters of Criminal Breach of Trust and allied

offences

Of Section 405

(Definition of Criminal Breach of trust)

& Section 406

(Punishment for Criminal Breach of trust)

On the matter of ingredients of Criminal Breach of Trust

• To make out a case of criminal breach of trust it is generally necessary to show that the property belonged to someone other than the accused , that the accused acquired it lawfully or with the consent of the owner, that it was in the physical or constructive possession of the accused at the time of conversion, that the accused occupied a fiduciary relationship. The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure in the breach of an obligation to account for the property entrusted, if proved, may in the light of others circumstances, justifiably lead to an inference of dishonest misappropriation or conversion. (15 DLR 97)

On Entrustment

• Entrustment connotes that the accused held the property in fiduciary capacity. The expression ‘entrustment’ contemplates creation of relationship whereby owner of the property makes it over to another person to retain it by him until certain contingency arises or to be disposed of by him on the happening of some event. (40 DLR 483)

• Under the concept of entrustment the person who transfers possession of the property to second party still remains the legal owner of the property and the person so put in possession, only obtains a special interest by way of claim for money advanced for the safe keeping of the thing. (40 DLR 46)

• Entrustment can be physical as well as symbolical or constructive. It is an essential ingredient of the offence of criminal breach of trust and a man cannot be guilty of this offence unless he is entrusted with the amount. If section 34 PC is to be applied to punish several persons for the offence of criminal breach of trust, it is necessary to establish that all of them were entrusted with the amount. In the absence of entrustment a person may be guilty of abetment but cannot be charged and punished

as a principal offender by the application of section 34, for this section cannot create entrustment where there is none. (PLD 1952 Dhaka 354)

• Entrustment is an essential ingredient of offence of criminal breach of trust and a man cannot be guilty of this offence unless he is entrusted with the amount. If several persons are charged for an offence of criminal breach of trust and section 34 PC is sought to be applied to punish all of them for criminal breach of trust it is necessary to establish that all of them were entrusted with the amount. (4 DLR 80)

• Mere entrustment or dominion over the property will not prove the charge. The prosecution to prove its misappropriation by the accused or its conversion by him. (41 DLR 4)

• Under the concept of entrustment the person who transfers possession of the property to second party still remains the legal owner of the property and the person so put in possession, only obtains a special interest by way of a claim for money advanced for the safe keeping of the thing. (40 DLR 46)

• Interpretation of entrustment under section 405 PC- It connotes that accused holds the property in a fiduciary capacity, the property remaining in the possession or control of the accused as a Bailee. (40 DLR 46)

On transaction of loan

• The transaction of loan of money under an agreement does not operate as an entrustment occurring in section 405 of the Penal Code. (40 DLR 46)

• In a transaction of loan the loan giver does not retain any control over the loan amount and it becomes the personal money of the loanee and, as such, he cannot be conceived of committing any breach of trust. If there is any violation of the terms of agreement under the contract, that will be decided in the civil Court and no criminal action would lie. (40 DLR 46)

• In a transaction of loan the loan giver does not hold any control over the loan amount and as such it constitutes no breach of trust. If there is any breach of contract the remedy is in the civil Court and that no criminal case would lie. (40 DLR 48)

• Mere retention of money without evidence of dishonest misappropriation–No offence. (8 DLR(WP) 64)

• Court below in passing the order of making repayment of sale proceeds acted ex mero motu and transgressed their jurisdiction. (41 DLR 4)

• Where there is no trust this section does not apply. A person taking loan is not entrusted with any property. ( 6 L.B.R. 46)

• Money lent by the complainant to the accused constitutes no offence of criminal breach of trust in the absence of entrustment. (45 DLR 102)

• Unless there is a inducement and entrustment, loan taken for business purpose and failure or refusal to repay the same is a civil liability and does not constitute offence punishable under S.406 and 420 PC. [6 MLR(2001) 17]

• Criminal breach of trust in respect of loan taken from the Bank by way of overdraft. Security was furnished by the loanee more than a year after disbursement. There was no security when the payment was made. Criminal breach of trust is constituted by disposal of property held in trust in violation of any direction of law. [ 4 BLD 10(AD) ]

On violation of Contract

• Violation of contract will hold good for an offence of criminal breach of trust if the condition as to entrustment within the meaning of section 405 is satisfied. (40 DLR 46)

On liability of Partner

• A partner of a partnership business cannot be held liable under section 405 of the Penal Code. [36 DLR (AD) 14]

• A partner failing to account may not be accused for fraudulent breach of trust unless there is a clear agreement whereby the accused is entrusted with the property for specific purpose which the accused fails to carry out and misappropriated it. (39 DLR 24)

On Firm

• A person who is a manager of the firm cannot be held criminally liable for any breach of trust if the entrustment of goods was made to the firm and not to him personally. (PLD 1951 Lah 342)

On Security Deposit

• Mere failure on the part of the employer to return security deposit promptly on demand by the employee after the termination of his service is not sufficient for his conviction under S.406, in the absence of proof that he had not the money with him or had converted it to his own use. (48 CWN 734)

On Breach of Trust by Bank manager

• Where a manager of a Bank took security for overdraft from a customer shortly afterwards returned the security to the customer before the overdraft was satisfied, it was held that there was dishonesty under S.24, on the part of the manager and the customer and that the manager was guilty of criminal breach of trust while the customer for abetment. (1944 Cal 92)

On place for trial

• Jurisdiction to try the accused will be at the place where that dishonest misappropriation or conversion has taken place. Where it is alleged that the accused has failed to account for the property; and the jurisdiction exists at the place where the property should have been delivered by the accused. The second part of S.405 is to be invoked only when the first part cannot. The fact that there are consequences of an offence does not give any Court jurisdiction in the place where those consequences occur unless those consequences are necessary ingredients of the offence itself. (AIR 1942 All 439)

On the matter of Bail

• Charge of criminal breach of trust would not be established without specific proof of entrustment and dishonest misappropriation- Accused would be entitled to bail when there is no specific proof of entrustment and dishonest misappropriation . (1997 CriLJ 444)

On the matter of civil claim

• Sections 406 and 420 : Since there is a claim and counter claim between the parties this criminal case should not be allowed to proceed and they be given an opportunity to sort out claims in the Civil Court. (55 DLR 5)

On Quashment of Proceedings

• Sections 406 and 420 : Quashing of proceedings for alleged breach of trust and cheating: Money claims not the outcome of a particular transaction but arose after year-end accounting following regular business between the parties. If on settlement of accounts at the end of a period some money falls due to one party from the other party and the other party fails to pay the dues, such liability cannot be termed criminal liability. Allegation that dues were allowed to accrue dishonestly, neither attract an offence under section 420 nor under section 406 or under any other section. The whole allegation in complaint petition, even if true, cannot form basis of criminal proceeding. The proceedings are quashed. [42 DLR (AD) 240]

• Sections 406 and 420 : When allegations show that the accused had initial intention to deceive, criminal case should not be quashed on the plea of pendency of civil suit for realisation of the money in question. (43 DLR 410)

• Sections 406 and 420 : As the petition of complaint discloses an initial intention to deceive the complainant, who was persuaded to advance a large amount of money to the accused persons and, as such , there is no ground for quashing the proceeding. (2 BLC 227)

• Sections 406 and 420 : The facts as alleged in the petition of complaint constitute a prima facie criminal intention of cheating and deception in the mind of the petitioner

which is still continuing because of the non-payment of any part of the amount alleged in the complaint petition and all these are the matters for decision at the time of trial after taking evidences and that after exhausting the remedy under section 439A the jurisdiction under section 561 A, Cr PC cannot be invoked. (3 BLC 378)

• Sections 406 and 420 : Criminal breach of trust and cheating- In quashing a criminal proceeding the court is considered only with the question of a prima facie case against the accused. Its intention to deceive or to commit criminal breach of trust is prima facie established, there is no question of quashing the proceeding simply because of the pendency of a civil suit between the parties. (2001 BLD 383)

On Pawnee or Pledgee

• When the convict appellant took the shallow machine from the Krishi Bank against loan but subsequently sold away the same without permission of the Bank and adjustment of outstanding dues in violation of the pledge, it amounts to dishonest misappropriation and breach of trust punishable under section 406 PC.[8 MLR(2003) 39]

On the Auctioneer

• Sec. 406 PC does not apply to the misappropriation of the sale proceeds of a property entrusted to auctioneer. (41 C. 844)

On Deposit

• Return of deposit to the brother of a depositor with the best intention and without moral turpitude does not amount to criminal breach of trust. (1929 Sind 119)

On Hire Purchase

• Disposing of article purchased on hire-purchase system in violation of the contract that is without payment of the last installment amounts to criminal breach of trust. (17 Bom LR 670)

On violation of any direction of law of any trust

• Where accused was entrusted with a tractor and he was under obligation to produce it before the Court, but instead of producing the tractor he disposed of it in violation of any legal contract express or implied which he had made touching the discharge of such trust. All the ingredients of criminal breach of trust were prima facie present in the action of appellant, and as such, he came well within the mischief of this section. [35 DLR (SC) 281]

Of Section 407(Criminal Breach of Trust by carrier etc.)

On Benefit of Doubt

• The onus of proving misappropriation is on the prosecution and though in the absence of explanation there may be a presumption for non-delivery that the goods have been misappropriated the existence of facts which suggest an explanation would be sufficient for giving the accused the benefit of doubt. (14 DLR 94)

On Evidence and Proof

• Prosecution to prove in order to establish charge u/s.407-

1. That the accused is a carrier, wharfinger or warehouse-keeper.

2. That he was as such entrusted with the property in question.

3. That he committed criminal breach of trust in respect of it.

To constitute an offence under this section it must be shown that at least some of the property entrusted cannot accounted for by the accused. (9 Bom. L.R. 229)

Of Section 408(Criminal Breach of Trust by clerk or servant)

On Partnership

• Where a partner receives partnership goods, he does not do so in a fiduciary capacity and therefore , when he sells some quantity of jute of the partnership business which was made over to him to carry to some place and himself appropriated the price thereof, he cannot be convicted on a charge of criminal breach of trust under section 408. (3 DLR 449)

On money received on behalf of master-not accounted for

• Where accused admittedly received moneys belonging to his master and failed to account for or give a satisfactory explanation, he is criminally as well as civilly liable to his master. He can therefore be convicted under S.408 of the PC even when it could not be shown that he had misappropriated any specific sum. (1942 Oudh 89)

On nature of punishment

• Though it is permissible under section 408 to inflict sentence of fine simultaneously with the substantive sentence of imprisonment, ordinarily the double sentence should not be inflicted unless necessary in the interest of justice. (4 DLR 36)

Of Section 409(Criminal Breach of Trust by public servant, or by banker, merchant or agent)

On ingredients of the offence

• Where the charge against an accused person is that of criminal breach of trust, the prosecution must prove not only entrustment of or dominion over property but also that the accused either dishonestly misappropriated, converted, used or disposed of that property himself or that he wilfully suffered some other person to do so. The prosecution must affirmatively prove these ingredients of the offence unless the receipt of the money is admitted and the accused offers no satisfactory explanation of what he did with it. [9 DLR (SC) 14]

On cognizance of the offence

• Cognizance of the offence under section 409 PPC taken by the Sessions judge as the Senior Special Judge is mere irregularity in registering the case as a special case. (40 DLR 431)

On prosecution of the offence

• Where in respect of a prosecution of a public servant under section 409, it was contended on behalf of the accused that so far as public servants are concerned, the provisions of section 409 have been repealed by section 5 of Act II of 1947 (Prevention of Corruption Act, 1947) so that if it is sought to prosecute a public servant for such an offence, it must be for criminal misconduct under Act II of 1947 and for no other offence. It was held that the prosecution of the accused under section 409 was in accordance with law. [5 DLR(WP) 40(42)]

C h a p t e r

10 Case laws on the matters of Cheating and allied offences

C h a p t e r

10 Case laws on the matters of Cheating and allied offences

________________________________________________________

Of Section 415

(Definition of Cheating)

& Section 417

(Punishment for Cheating)

On the matter of ingredients of Cheating

• It was held that i) In order to constitute cheating it must be established that someone is

made to part with some property on the promise of another to return or give

something in lieu thereof which the latter had no intention to give. The initial

intention to deceive, therefore, must be established to justify conviction—however

that intention to cheat to be gathered from surrounding circumstances. ii) A dishonest

concealment of facts is a deception within the meaning of sec.415 PC. Such a

deception is an ingredient of cheating. [ 27 DLR(AD) 175]

On the meaning of ‘Property’

• ‘Property’ meaning of– procuring certificate to get admission in a college– not a

‘property’. No harm to reputation is caused by attesting such certificate. [14 DLR

(SC) 235. ]

• ‘Property’ does not depend upon its possessing a money or market value and still it

may have a value for its owner. It may still be capable of being owned, possessed or

transferred and, therefore, capable of creating property or legal rights in its owner,

possessor, holder or transferor. [14 DLR (SC) 235]

• The following have been held to be ‘property’ within the meaning of this section:

a) a licence. AIR 1948 Mad 268

b) a health certificate. AIR 1920 Mad 131

c) a warrant of attachment. (1904) 1 Cri LJ 332 (Bom)

d) an admission card to sit for a University examination. AIR 1961 SC 1698

e) a salary of a person. AIR 1942 Pat 53

f) a passport. AIR 1977 SC 1174

On void contracts

• A criminal prosecution for cheating can be based on a contract even if it cannot be enforced in a civil Court on the ground that it is void as being opposed to public policy etc. (AIR 1952 All 428)

On damage or harm

• The expression ‘harm’ connotes injury to a person in body, mind reputation or property. (AIR 1966 SC 1773)

On attempt to cheat

• A false representation made with the necessary intention will constitute only the offence of attempt to cheat, when nobody is deceived by that representation. (AIR 1934 Bom 48)

On civil liability

That the accused is liable in a Civil Court under a contract or agreement is no defence to a charge of cheating, if his action amounts to an offence under this section. (AIR 1966 All 594)

Of Section 416

(Definition of Cheating by personation)

&

Section 419

(Punishment for Cheating by

personation)

On personation

• To personate means to pretend to be a particular person which the person so personating is not. [(1864) 122 ER 628]

On ingredients of offence • In case of cheating by personation all the ingredients of sec.415 PC must be

present. (AIR 1974 SC 1811)

On Personation at examination

• A person who sat at an examination personating another and submitted answer papers purporting to be the answer paper of that other, he was guilty under this section as also for the offence of forgery. (AIR 1936 Cal 403)

On personation by witness

• A person who falsely deposing in another’s name should be charged with giving false evidence, under Section 193, and not with cheating by personation. A witness deposing in another’s name is not guilty of cheating by personation. (1 Bom. HCR 89)

On personation by Foreign National

• Foreign National committing offence is not exempted. Where an American National pretended himself to be a British National and gained entry into India by use of a forged passport, he was guilty of cheating by personation. (AIR 1968 Mad 348)

On personation by Physician

• Where an accused pretended himself to be a certain well known eye specialist and induced the complainant to allow him to perform an operation on the eye of the complainant’s 12 years old son, he was guilty under the section. (AIR 1961 All 639)

On the harm or injury in mind, body or reputation

• Offence under the section not punishable unless the person concerned suffers either in mind, body or reputation. (12 DLR 834)

• Where no injury or possible injury to the person deceived has either been alleged or proved section 419 of the Penal Code cannot apply.(13 DLR 436)

Of Section 418

(Cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to

protect)

On offence under S.418

• Making licensing agreement on unsolicited offer does not constitute offence u/s.418[9 MLR (2004) 364]

On false balance sheets

• If the Bank management, dishonestly, put before the shareholders balance-sheets which they knew to be materially false and misleading and likely to mislead the public as to the condition of the Bank, and conceal its true condition and thereby induce depositors to allow their money to remain in deposit in the Bank, they commit an offence under this section. But the mere fact that directors pass an incorrect balance-sheet is not sufficient to charge them with cheating without knowledge. They could be held guilty in the absence of false representation and dishonest concealment of facts either in the prospectus issued or in the conduct of promo tiers calculated to deceive the public and thereby induce it to contribute money towards the scheme. (1971 Cr. LJ 1184)

On evidence and proof

• Prosecution to bring home charge u/s.418 must prove:

1. That the accused cheated some person.

2. That he was under a legal obligation to protect the interest of that person.

3. That the cheating had relation thereto.

4.That he knew he was likely to cause wrongful loss to such person. (13 DLR 436)

Of Section 420

(Cheating and dishonestly inducing delivery of property)

On initial intention to deceive

• To constitute an offence under section 420 Penal Code there must be allegation of deception at the initial stage of the transaction. (52 DLR 105)

• To establish the offence of cheating it must be shown that the criminal intent to cheat exists from the very beginning – Its subsequent exhibition is not a test of cheating. (26 DLR 146)

• It is not correct to say that in a case of cheating there is no necessity to prove initial intention to deceive and that subsequent conduct of the accused is enough to find him guilty. (45 DLR 578)

• It is not correct to say that in a case of cheating there is no necessity to prove initial intention to deceive and that subsequent conduct of the accused is enough to find him guilty. (45 DLR 578)

On ingredients of the offence

• Ingredients which shall have to be established before recording an order of conviction. In order to bring home charge under section 420 it is necessary of the prosecution to prove beyond all reasonable doubts that the representation made by the accused was known to him to be false and that acting on that false representation the complainant parted with his money. In dealing with an offence under section 420, it is necessary for a Court of law to find whether the person making the representation had the knowledge that the statement made by him was false. In a case under section 420, a Court is not concerned with a correct interpretation of a statute but with existence or otherwise of a bonafide belief whether there was a reasonable ground for the accused to think that he was entitled to act in the way he did in the particular case. [(1962) 14 DLR 265]

On abuse of the process of the Court

• From the petition of complainant it appears that the transaction in question was normal and routine transaction and , as such, the liability of the accused persons if any, is civil liability. As there are no ingredients of the penal Code in the petition of complaint, continuation of the proceeding will be an abuse of the process of the court and, as such, the proceeding is liable to be quashed. (1999 BLD 461)

On complainant who institutes cases

• Complaint under section 420 need not necessarily be field by cheated person alone. [(1968) 20 DLR (WP) 132]

• Complaint by a person who is not himself cheated is valid in law. It is true that the accused of a prosecution launched for cheating somebody to a large extent depends, in view of the ingredients of the offence of cheating, upon the examination of the person cheated. [(1962) 14 DLR 198]

On peremptory application of special law

• An offence under section 138 of Negotiable Instruments Act is for dishonour of a cheque for insufficiency of fund, etc. Whereas an offence under section 420 of the Penal Code for cheating is a distinct offence. The rule of law about the peremptory application of the special law in place of general law for trial of an offence hardly applies when the offences are distinct under the two law. (49 DLR 464)

On civil suit for specific performance of contract

• Civil suit lies for refund of money or specific performance of contract. The conviction of the petitioner under section 420 of the Penal Code for cheating does not debar the man cheated from filing a civil suit for specific performance of contract or for return of the money taken by the petitioner by practising deception. [(1960) 12 DLR 520]

On quashment of proceeding

• As the money was taken after giving a specific promise returning it within a specified time the failure to pay the money attracts the offence of cheating. The proceeding cannot be quashed. (54 DLR 506)

On dishonoring of a cheque-whether constitutes offence of cheating

• Dishonoring of the cheque itself cannot be considered as an ingredient of the offence of cheating unless there is evidence to show that after issuing it he has done something more to defraud the payee. Even such a cheque issued with the knowledge that he has not such amount in the Bank account at the moment it will not amount to cheating if he has intention to deposit the money before the cheque is presented for encashment. Mere dishonoring of the cheques itself is not an ingredient of cheating. [20 BLD (HCD) 499]

• An offence under section 138 of the Negotiable Instruments Act and section 420 of the Penal Code are two distinct offences, one independent of the other. The aggrieved party has right to seek remedy under either of the two penal provisions of law. [ 23 BLD (HCD) 488]

On completion of the offence of cheating

• A induces B by false representation to deliver some property to C—Offence of cheating is complete even though A does not gain anything. It is never necessary ingredient of an offence like this that the person(which expression shall also include a person by legal fiction) cheated should deliver the property to the cheat. For an offence punishable under section 420 of the Penal Code would be complete if A cheats B to deliver C and in that case it would not be even necessary that A should stand to gain by its delivery to C for if B had suffered wrongful loss by the wrongful delivery of his property to C, A’s act should be equally dishonest though he did not profit by it. [(1981) 33 DLR 262]

C h a p t e r

11 Instances involving the Civil matters in SS.406/420 litigations

C h a p t e r

11 Instances involving the Civil matters in SS.406/420 litigations

11.1. Purely Civil Matters brought in the Criminal Actions

‘Civil matter’: Meaning and Scope From any given fact civil matters necessarily mean those matters embracing civil dispute in any litigation. These matters are generally and basically involved in the suits of civil nature. So, from the concept of suits of civil nature a wholesale idea about civil matters can be retrieved. To that purpose we are inclined to import the concept of ‘civil matters’ hereunder:

The word ‘civil’ according to the dictionary meaning suggests, ‘relating to the citizen as an

individual; civil rights’. In Black’s Law Dictionary it is defined as, ‘relating to provide rights

and remedies sought by a civil actions as contrasted with criminal proceedings’. In law it is

understood as an antonym to criminal. Historically two broad classifications were civil and

criminal. Revenue, tax and company, etc. were added to it later. But they too pertain to the

larger family of ‘civil’. There is thus no doubt about the width of the word ‘civil’. Therefore

the word civil pertains to rights and remedies of a citizen as distinguished from criminal,

political, etc. The expression ‘civil proceeding’ covers all proceedings in which a party

asserts civil rights conferred by a civil law. Thus, a suit is of a civil nature if the principal

question therein relates to the determination of a civil right and enforcement thereof. A suit

in which the right to property or to an office is contested is a suit of a civil nature,

notwithstanding that such right may depend entirely on the decision of a question as to

religious rites or ceremonies. The following are some examples of suits of civil nature:

a) Suits involving the matter of rights to property.

b) Suits involving the matter of rights to an office.

c) Suits involving the matter of rights of worship.

d) Suits involving the matter of damages for civil wrongs.

e) Suits involving the matter of specific performance of contract.

f) Suits involving the matter of damages for breach of contracts.

g) Suits involving the matter of specific reliefs.

h) Suits involving the matter of restitution of conjugal rights.

i) Suits involving the matter of dissolution of marriage.

j) Suits involving the matter of rents.

k) Suits involving the matter of accounts.

l) Suits involving the matter of rights of franchise.

m) Suits involving the matter of rights to hereditary offices.

n) Suits involving the matter of wrongful dismissal from service

o) Suits involving the matter of salaries, etc.

Case-based discussion on Judicial Proceeding involving Civil matters in Criminal Courts

In a case cited in 42 DLR (AD) 240 the Appellate Division of Hon’ble Supreme Court of Bangladesh held :

“We are convinced with the merit of the submission that the alleged amount said to have fallen due to the complainant having accrued in course of a long business transaction, the whole allegation in the petition of complaint, even if true, cannot form the basis of any criminal proceeding, much less for cheating, for, the alleged liability incurred is essentially civil in nature. To hold otherwise would be to ignore the realities of business transactions and to encourage civil claims to be brought into criminal courts under some contrivance for the purpose of putting pressure for re-payment of alleged dues which necessarily got to be settled and sorted out in the civil court.”

So, as per the abovementioned case law it is clear that if any amount is due as a result of any

long business transaction, no charge can be framed under sections 406/420 of the Penal Code.

If the transaction is a loan then normally it will be a civil liability unless there is any

allegation of any inducement or false representation.

In cases cited in 49 DLR (AD) 132 and 55 DLR (AD) 58 the Appellate Division of Hon’ble Supreme Court of Bangladesh held :

“There is no bar as to initiation of a criminal case if a civil suit is pending on the self same

fact.”

Furthermore, in case of loan, no charge can be framed under sections 406/420 of the Penal

Code if no promise is made to return money within specified time and there exists no

allegation of inducement at the time of taking loan.(vide 9 BLT 417 and 6 BLC 450)

In a transaction of loan the loan giver does not hold any control over the loan amount and as such it constitutes no breach of trust. If there is any breach of contract the remedy is in the civil Court and that no criminal case would lie. (40 DLR 48)

On the matter of liability: Purely Civil or Crimina l?

It is also a settled principle of law that if the transaction is a business transaction, there is no

criminal liability, it will be a civil liability if any payment due is not made.( vide 19 BLD

(AD) 128 paragraph 9, 4 BLC (AD) 167 and 15 BLC 29.

But if there is any specific promise of making any payment within a specific time, failure to

make the payment will be considered to be an offence under section 420 of the Penal Code

and charge is to be framed against the accused under that section.

In cases cited in 46 DLR (AD) 180 and 52 DLR 530 it was held :

“Here, the complainant’s case is that he, in good faith, delivered the Jute on the accused’s

inducement of part payment and specific promise to pay the balance amount within three

days. From what has been alleged in the complaint it cannot be said that there was no prima

facie case against the accused.”

But if there is no allegation of specific promise for making payment within a specific time,

failure to pay the amount will not be a criminal liability but will be a civil liability and as

such no charge can be framed. If any amount is due after accounting, in that case also, there

will be no criminal liability.(vide 42 DLR (AD) 240, 13 BLD (AD) 28, 10 BCR (AD) 287).

A transaction may be a business transaction or purely transaction of loan and if there is any

refusal to pay the amount due, but if the accused denies the transaction or totally denies to

pay any amount, then the offence of cheating will be attracted and the liability will not be a

civil liability.

In a case cited in 43 DLR (AD) 173 it was held :

“Since, according to the petition of complaint, the accused petitioner totally denies receipt of any sum from the complainant respondent the question of civil liability does not arise.”

But in another case when there was no allegation that the accused denied that he would not

pay the balance amount and there was no allegation of initial deception, the Appellate

Division approved the order of quashment of the proceeding passed by the High Court

Division.(Vide 50 DLR (AD) 163).

Where complainant’s step-brother realized G.P. Fund and gratuity of their deceased father,

several years back, and misappropriated the same. No property having been entrusted by

complainant to accused, the ingredients of offence or criminal misappropriation were not

made out and dispute was held as one of civil nature. (1973 PLD LJ 225)

11.2. Judicial Proceeding involving Civil matters mingled or amalgamated with Criminal matters

In most of the cases relating to offences under 406/420, the defence is taken by arguing that

the liability is a civil liability. At the time of framing charge it may not be possible to

determine whether the liability is purely a civil liability or not. On this point the observations

made by Appellate Division in the case of Rustom Ali Mataubbar Vs. M. Salahuddin and

others reported in 7 BLT (AD) 132 are relevant. The observations are:

“It will depend on the allegations that are made in the criminal Court in respect of the

transaction which is prima facie of a civil nature. A transaction may be of civil nature but by

reason of the allegations made in a particular case there may also appear elements/ingredients

of criminality in the transaction. In the instant case the complainant has specifically alleged

that the accused had fraudulently deceived him and thereby misappropriated TK.5,00,000/-

.....It will be for the complainant to prove his allegations by evidence at the trial.”

From the observations made in the decision referred above, it is clear that at the time of

framing charge, the allegations made are to be taken into consideration and if such allegations

attract the offences under section 406/420, charge is to be framed under those sections.

C h a p t e r

12 Cheque Dishonor litigations U/S.138 of NI Act and U/SS. 406/420 PC

C h a p t e r

12 Cheque Dishonor litigations U/S.138 of NI Act and U/SS. 406/420 PC

Dishonor of Cheques

Introduction:

Cheques are very convenient instruments which can be issued to settle payments or

obligations in a contract or even to give gifts. Section 138 to 142 are incorporated in

Negotiable Instruments Act,1881 with a view to encourage the culture of use of cheques and

enhancing the credibility of the instrument. The NI Act makes the drawer of cheque liable

for penalties in case of dishonour of cheques due to insufficiency of funds or for the reason

that it exceeds the arrangements made by the drawer. The NI Act also contains sufficient safe

guards to protect the drawer of cheques by giving him an opportunity to make good the

payment of dishonoured Cheque when a demand is made by the payee.

History of the Act and objective of amendments:

The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial

Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 to insert a new

Chapter XVII with Sections 138 to 142. These new sections came into force w.e.f 1.4.1989.

The Act was further amended in 2002 by inserting Sections 143 to 147 w.e.f 06.02.2003 to

deal with certain deficiencies noticed in the Act. Salient features of amendment are

acceptance of Bankers memo of dishonour as prima facie evidence, evidence of witness or

accused on affidavit, serving of summons by post/courier for speedy trial/prosecution,

increase of period for issuance of notice by payee and enhancing of punishment. Thus the

main thrust of the amendment is to provide for a speedy and time bound trial, punishment of

2 years and double the amount of the cheque as fine. Another notable feature is that it

provides for compounding of the offence.

Offence under the NI Act:

Offence under Section 138 of the N I Act shall be deemed to have been committed, if the

following conditions are satisfied:

a) Cheque must have been drawn by a person(the drawer) in favour of a payee on his bank

account for making payment

b) Such payment must be either in whole or partial discharge of a legally enforceable debt

c) Cheque must have been returned by the Banker to the payee or holder in due course due to

insufficient balance in the account of the drawer or it exceeds the arrangement he had with

the bank,

Proviso requires fulfillment following additional conditions:

a) Cheque must be presented within a period of 6 months from the date of cheque or its

validity period whichever is earlier.

b) The payee or holder in due course must demand payment of the cheque amount by written

notice within 15 days of receipt of notice

c) Such notice must be issued within 30 days from the date of receipt of intimation of

dishonour from bank and

d) The drawer of cheque fails to pay demanded sum within 15 days from the date of receipt

of the notice

Punishment for offence

The punishment provided for the offence u/s 138 is imprisonment for a term which may

extend to a maximum period of 2 years or with a fine which may extend to a maximum of

twice the amount of the cheque or with both.

Let us now shift our focus to certain requirements for making out an offence and for initiating

prosecution. It is equally important for us to examine legal issues settled by judgments of

Supreme Court. These judgements paved way for filling up deficiencies in the Act and also

in some cases provided for clarifications wherever ambiguity existed.

1. Post dated cheque and its dishonour

Every cheque shall be presumed to be drawn on the date mentioned on the face of the cheque.

A post dated cheque is a bill of exchange when it is written or drawn and it is not payable on

demand until the date shown on the cheque. If post dated cheque is dishonored because of its

presentation before it became payable on demand, no offence u/s 138 can be alleged. The

controversy is settled by the decision of the supreme court in Anil Kumar Sawhney Vs

Gulshan Rai(1993) 4 SCC 424. In this case Supreme Court held that a post dated cheque is a

bill of exchange and it becomes a cheque under the NI act only on the date which is written

on the said cheque and period of six months has to be reckoned from the date of the cheque.

2. Jurisdiction:

Most often people are confused about the place where criminal compliant can be filed under

the NI Act, as the Act is silent on this matter. Since the Criminal courts are approached, the

issue needs to be examined from the point of view of the Criminal Procedure Code. Section

177 of CrPC provides that every offence shall ordinarily be inquired into and tried by a Court

within whose local jurisdiction it was committed. Section 178 provides that offence may be

tried at by a court having jurisdiction over any of the local areas where offence is committed.

It is possible that an offence may be committed in several local areas or partly in one area

and partly in another area. It is also possible that some times offence may consist of several

acts done in different areas In all the above situations, the court having jurisdiction over any

of such local areas may try the offence.

Judgments on Jurisdiction:

The judgment of supreme court In K Bhaskaran V sankaran Vaidyaa Balan and

Anr(1999) 7 SCC 510 dealt with this issue elaborately. The Hon’ble Supreme court opined

that offence can be completed only with concatenation of a number of acts, namely, drawing

of cheque, presentation of cheque, returning of the cheque by the bank, notice by payee and

failure of drawer of cheque within 15 days of receipt of notice. Any one of the courts under

whose jurisdiction the above acts have taken place can try the offence. In other words

complainant can file compliant in any one of the courts where the cause of arises or acts have

been committed.

In Harman Electronics(P) Ltd and Anr Vs National Panasonic India Ltd(2009)1 comp

LJ 29 (SC) the Hon’ble supreme court had the occasion to examine the issue of jurisdiction

again. In this case the appellant is a resident of Chandigarh issued a cheque which was

dishonored. The cheque was issued at Chandigarh where the complainant had a branch and

was presented at Chandigarh. Notice demanding payment however was issued by the

complainant from its Head office at Delhi to the accsued’s office at Chandigarh. On failure

to respond to the notice, a complaint was filed in Delhi. Both lower court and High court

have placed reliance on K Bhaskaran V sankaran Vaidyaa Balan and Anr case and held

that Delhi court also has jurisdiction. The Appellant/Respondent in appeal contended that

Chandigarh court had jurisdiction to try the offence but his appeal was dismissed. But in

appeal, the Supreme court held that a court derives jurisdiction when a cause of action arises.

Jurisdiction can not be conferred for any act of omission or commission on the part of the

accused. Issuance of notice would not give rise to cause of action but communication of the

notice would and therefore Delhi High court would not have jurisdiction and it directed for

transfer of the case pending in Delhi to Chandigarh court.

3. Successive presentation of cheque and Cause of action:

Usually when a cheque is dishonored, the drawer is informed and some times he advises to

present the cheque again as in the mean time he must have arranged for funds or some credits

have come into his accounts just after dishonour or made arrangement with his bankers.

What is the risk is such cases? In Sadanandan Bhadrant Vs. Madhavan Sunil Kumar AIR

1998 SC 3043

Supreme court ruled that a cheque can be presented any number of times during its validity

period by the payee. However on each presentation of the cheque and its dishonour, a fresh

right accrues in his favour and not cause of action to file complaint. Once he chooses to give

a notice u/s138(b) and the drawer fails to pay within the stipulated time, the cause of action

for filing the complaint will arise immediately on the following day of expiry of 15 days

notice period and remains alive till 30 days. Complaint has to be filed before expiry of 30

days from the date of expiry of notice period.

If a complaint is filed before expiry of 15 days notice period, it becomes a premature

complaint and it will be dismissed. If complaint is filed after expiry of 30 days complaint will

be dismissed on the ground of limitation. So one has to be clear about cause of action and

filing of complaint before the limitation period runs out

4. Presumption as to Legally enforceable debt.

Section 139 says that it shall be presumed, unless the Contrary is proved, that the holder of a

cheque, received the Cheque for discharge, in whole or in part, or any debt or other liability.

Supreme court reiterated the contents of section 139 in the case of KN Bena V

Muniyappan & Another, AIR 2001 SC 2895 that the onus is on the accused to prove by

cogent evidence that there was no debt or liability.

5. Instructions in Bank’s memo:

The payee bank while returning the cheque gives reason for dishnour. Most often it mentions

reasons such as “ exceeds the arrangement” or “refer to drawer”. Some times “stop payment

“ instruction is also ticked. All these reasons of dishonour will lead to a presumption of

dishonour of cheque. The supreme court in the case of Modi Cements Ltd Vs M/s V

Kuchikumar Nandi AIR SC 1998 1057 ruled that once the cheque is issued by the drawer, a

presumption under S. 139 in favour of holder must follow and merely because the drawer

issues a notice to the drawee or to the Bank for stoppage of the payment, it will not preclude

an action under Section 138 by the drawee or the holder of a cheque in due course. This

judgment overruled it previous Judgment in M/s. Electronics Trade and Technology

Development Corpn. Ltd., Secunderabad Vs M/s. Indian Technologists and Engineers

(Electronics) Pvt. Ltd. and another. Supreme court reiterated the same views in MMTC

Ltd & Anr Vs. Ms. Medchal Chemicals & pharma(P) Ltd. AIR 2002 SC 182.

6. Notice and its requirements:

The NI Act is silent about the manner of service of notice. However, sending by notice by

registered post is desirable as it will be easier to prove service of notice. In SIL Import, M/s.

USA v. M/s. Exim Aides Silk Exporters" AIR 1999 SUPREME COURT 1609, the

Supreme court ruled that if notice envisaged in cl. (b) of the proviso to S. 138 was

transmitted by Fax, it would be a compliance with the legal requirement therefore notice

demanding payment can be sent by Fax is also equally acceptable.

If notice is sent by the payee at the correct address of the drawer, it would be deemed to be a

proper service of notice. Some times notice issued is refused or unclaimed by the addressee.

In situations such as this, it is well settled that a notice refused to be accepted by the addresee

can be presumed to have been served on him. The decided cases are Harcharan Singh Vs

Shivrani AIR 1981 SC 1284 Jagdish Singh v. Natthu Singh AIR 1992 SC 1604. Supreme

court held that presumption of issuance of notice and receipt can be inferred in such cases.

Courts should not adopt an interpretation which will help the dishonest evader and thereby

defeats the very purpose of the Act. If Acknowledgment card is not received, how the period

for filing complaint will be decided? In cases such as this, on expiry of 45 days period from

the date of notice, action can be taken for filing a complaint.

It must be remembered that the notice issued must demand payment of cheque amount in

categorical terms and demand should not be vague. Notice can not be an omnibus demand.

The supreme court in the case of Suman Sethi Vs Ajay K Churiwala & Anr AIR 2000 SC

828 ruled that the said amount of money occurring in clause (b) and (c) of section 138 refers

to the words ‘payment of any amount of money’ stated in the main section 138. It implies that

the demand has to be made for the amount of the cheque dishonored.

The object of the notice is to give another chance to the drawer of the cheque to make up for

his default.

7. Presumption as to consideration:

In the case of AV Murthy V B S Nagabasavanna 2002 Cr LJ 1449 SC held that dismissal

of a complaint at the threshold on the ground that the debt is time barred is erroneous and

not proper as consideration is presumed u/s 118 of NI act.

8. Dishonor of cheques by companies under SICA:

Supreme court in the case of Kusum Ingots & alloys Ltd Vs Pennar patterson securities

Ltd & ors AIR 2000 SC 954 held that criminal prosecution for dishonour cheques is neither

a proceeding for recovery of money nor for enforcement of a security. Prosecution against the

Directors of Sick companies would not be suspended merely on the ground that proceedings

against sick companies are suspended u/s 22 of SICA.

9. Cheque dishnour and Directors liability:

Many cases have been filed by Directors u/s 482 of Code of Criminal procedure, for

quashing of complaints. If a complaint is filed against a company and its directors,

presumption will be drawn as per Section141 of the NI Act against them unless they rebut

this presumption. Normally it is the Managing Director who looks after the day to day affairs

is supposed to be in the knowledge of the affairs of the company on day to day basis. Once a

notice is served on all directors, the burden is on them to show that they are not liable to be

convicted or it will be a good defense, if they can show that at the relevant time they were

not in-charge of the affairs of the company. Same is the case with the partnership firm.

Keeping in view the risk, Nominee Directors of Central or State government or a Financial

Corporation owned or controlled by the Central Government or the State Government, as the

case may be, are exempted from prosecution under NI Act.

10. Compounding of offence:

Section 147 provides that notwithstanding anything contained in the Code of Criminal

Procedure, 1973, (2 of 1974.) every offence punishable under NI Act shall be compoundable.

Before introduction of section 147 divergent views were expressed by various high courts

including Supreme Court. Critical analysis of judgment of Supreme court in Rajneesh

Aggarwal Vs Amit J Bhalla (2001)1SCJ 13leads one to conclude that once the offence is

committed, any payment made subsequent thereto will not absolve the accused of the liability.

However, a joint compromise petition filed may be considered as a mitigating factor while

awarding punishment for offence. Criminal proceedings can not be quashed simply because

accused made a deposit of cheque amount in the court. When offence u/s 307 is compounded

u/s 320, why an offence u/s 138 can not be compounded especially when both the parties file

a compromise petition.

In Anil Kumar Haritwal and another Vs Alka Gupta and another, AIR 2004 SC 3978,

Supreme court considered the prayer of the parties allowed the appeal and set aside the

conviction and sentence imposed on the appellants in the interest of justice and also in view

of the fact that Section 147 of the Negotiable Instruments Act permits compounding of the

offence.

Conclusion:

Although the NI Act provides for expeditious disposal of trial, the cases in the lower courts

move at a snail’s pace. A lot is desired in this direction. May be High courts should monitor

and issue directions to lower courts for speedy disposal of cases to achieve the objective of

the Act.

The laws concerning the offence of Cheque Dishonour

Chapter XVII of the Negotiable Instruments Act, 1881 enunciates the provisions on penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts. Dishonour of cheque for insufficiency, etc, of funds in the account (1) Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to thrice the amount of the cheque, or with both: (3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque

shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized. Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within thirty days of the receipt of the said notice. (1A) The notice required to be served under clause (b) of sub-section (1) shall be served in the following manner- (a) by delivering it to the person on whom it is to be served; or (b) by sending it by registered post with acknowledgement due to that person at his usual or last known place of abode or business in Bangladesh; or (c) by publication in a daily Bangla national newspaper having wide circulation. (2) Where any fine is realized under sub-section (1), any amount up to the face value of the cheque as far as is covered by the fine realized shall be paid to the holder. (3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized. (Vide Section 138 of NI Act)

Restriction in respect of appeal

Notwithstanding anything contained in the Code of Criminal Procedure, 1898, no appeal against any order of sentence under sub-section (1) of section 138 shall lie, unless an amount of not less than fifty per cent of the amount of the dishonoured cheque is deposited before filing the appeal in the court which awarded the sentence. (Vide Section 138A of NI Act)

Offences of Companies

(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation - For the purposes of this section- (a) “company” means anybody corporate and includes a firm or other association of individuals; and (b) “director” in relation to a firm, means a partner in the firm. (Vide Section 140 of NI Act)

Cognizance of offences

Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898),- (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138; (c) no court inferior to that of a Court of Sessions shall try any offence punishable under section 138. (Vide Section 141 of NI Act)

The jurisprudence of Cheque Dishonor litigation

Introduction:

Advent of cheques in the market have given a new dimension to the commercial and

corporate world, its time when people have preferred to carry and execute a small piece of

paper called Cheque than carrying the currency worth the value of cheque. Dealings in

cheques are vital and important not only for banking purposes but also for the commerce and

industry and the economy of the country. But pursuant to the rise in dealings with cheques

also rises the practice of giving cheques without any intention of honoring them. Before 1988

there being no effective legal provision to restrain people from issuing cheques without

having sufficient funds in their account or any stringent provision ot punish them in the vent

of such cheque not being honoured by their bankers and returned unpaid. Of course on

dishonour of cheques there is a civil liability accrued. However in reality the processes to

seek civil justice becomes notoriously dilatory and recover by way of a civil suit takes an

inordinately long time. To ensure promptitude and remedy against defaulters and to ensure

credibility of the holders of the negotiable instrument a criminal remedy of penalty was

inserted in Negotiable Instruments Act, 1881 in form of the Banking, Public Financial

Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 which were further

modified by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act,

2002[3]. This article endeavours to elucidate the penal provision[4] light of the amendments

and the judicial interpretations.

Scope:

Of the ten sections comprising the chapter of the Act, section 138 creates statutory offence in

the matter of dishonour of cheques on the ground of insufficiency of funds in the account

maintained by a person with the banker. Section 138 of the Act can be said to be falling either

in the acts which are not criminal in real sense, but are acts which in public interest are

prohibited under the penalty or those where although the proceeding may be in criminal form,

they are really only a summary mode of enforcing a civil right. Normally in criminal law

existence of guilty intent is an essential ingredient of a crime. However the Legislature can

always create an offence of absolute liability or strict liability where ‘mens rea’ is not at all

necessary.

While elucidating on this aspect the Kerala High Court in K. S. Anto v. Union of India held

that:

"Knowledge or reasonable belief, that pre requisite could be statutorily dispensed with in

appropriate cases by creating strict liability offences in the interest of the Nation."

Further the creation of the strict liability is an effective measure by encouraging greater

vigilance to prevent usual callous or otherwise attitude of drawers of cheques in discharge of

debts or otherwise attitude of drawers of cheques in discharge of debts or otherwise. The

words as appearing in clause (b) of S. 138 cannot be construed even to imply failure without

reasonable cause in view of the explicit language in which the provision is couched, the

principle of strict liability incorporated in the main enacting clause.

Circumstances of dishonour:

The circumstances under which dishonour of cheque takes place or that may contribute to the

situation would be irrelevant and are required to be totally ignored.

In Rakesh Nemkumar Porwal v. Narayan Dhondu Joglekar the Bombay High Court held

that:

"A clear reading of Section 138 leaves no doubt in our mind that the circumstances under

which such a dishonour takes place are required to be totally ignored. In such case, the law

only takes cognizance of the fact that the payment has not been forthcoming and it matters

little that any of the manifold reasons may have caused that situation."

Ingredients and requirements of the penal provisions:

Section 138 creates an offence for which the mental elements are not necessary. It is enough

if a cheque is drawn by the accused on an account maintained by him with a banker for

payment of any amount of money to another person from out of that account for discharge in

whole or in part, of any debt or other liability due. Therefore, whenever the cheques are on

account of insufficiency of funds or reasons referable to the drawer’s liability to provide for

funds, the provisions of section 138 of the Act would be attracted, provided the following

conditions are satisfied:

1. Existence of a live account

Existence of a "live account" at the time of issue of cheque is a condition precedent for

attracting penal liability for the offence under this section. A cheque cannot be issued de hors

an account maintained by its drawer with the banker. When the cheque is returned by the

bank unpaid because of the account of money standing to the credit of the cheque, to make

demand for payment as provided for payment as indicated in clause (b) of the proviso. The

words "that account" in the section denote to the account in respect of which the cheque was

drawn. No doubt if any person manages to issue a cheque without an account with the bank

concerned its consequences would not snowball into the offence described under section 138

of the Act. For the offence under section 138 of the Act there must have been an account

maintained by the drawer at the time of the cheque was drawn.

2. Issue of Cheque in discharge of a debt or liability

The cheque issued unpaid by the bank must have been issued in discharge of a debt or other

liability wholly or in part. Where a cheque is issued not for the purposes of discharge of any

debt or other liability, the maker of the cheque is not liable for prosecution under section 138

of the Act. A cheque given as a gift or for any other reasons and not for the satisfaction of

any debt or other liability, partly or wholly, even if it is returned unpaid will not meet the

penal consequences.

If the above conditions are fulfilled, irrespective of the mental conditions of the drawer he

shall be deemed to have committed an offence, provided the other three requisites are

fulfilled:

a) Presentation of the cheque within six months or within the period of its validity

The cheque must have been presented to the bank within a period of six months from the date

on which it is drawn or its period of validity, whichever is earlier. Thus if a cheque is valid

for three months and is presented to the bank within a period of six months the provisions of

this section shall not be attracted. However if the period of validity of the cheque is not

specified or prescribed the cheque is presented within six months from the date the cause of

action can arise. The six months are taken from the date the cheque was drawn.

b) Return of the cheque unpaid for reason of insufficiency of funds

The cheque must be returned either because the money standing to the credit of that account

is insufficient to honour the cheque or that it exceeds the arrangement made to be paid from

that account by an agreement with the bank. Even if the cheque is returned with the

endorsement "account closed" section 138 is attracted.

c) Issue of the notice of dishonour demanding payment within thirty days of receipt of

information as to dishonour of the cheque.

The payee or the holder in due course of the cheque has to give a notice in writing making a

demand for payment of the said amount of money to the drawer of the cheque. Such notice

must be given within 30 days of information from the bank regarding the return of cheque as

unpaid.

d) Failure of the drawer to make the payment within fifteen days of the receipt of the

payment

After the receipt of the above notice the drawer of the cheque has to make payment of said

amount of money to the payee or to the holder in due course of the cheque within 15 days of

the receipt of the notice. If the payment is not made after the receipt of the notice within

stipulated time a cause of action for initiating criminal proceedings under this section will

arise.

Constitutional validity of the provisions

In B. Mohana Krishna v. Union of India, the question came up for consideration that

whether the presumption raised in section 139 that the holder of the cheque received the

cheque of the nature referred to in section 138, unless the contrary is established is violative

of Article 20 (3) of the Constitution of India. The Court while answering negative held that:

"Unless a person is compelled to be a witness against himself Article 20 (3) has no

application. The person charged under section 138 is not compelled to be a witness against

himself. The presumption of the nature incorporated in section 139 is a common feature in

criminal statutes for example section 12 of the Protection of Civil rights Act. The

presumption under section 139 in favour of holder of cheque would not, therefore be violative

of Article 20 (3)."

Further such imposition of strict liability was put to judicial scrutiny on grounds of

unreasonableness and arbitrariness in Mayuri Pulse Mills v. Union of India where the

Bombay High Court held that:

"Normally in Criminal law existence of a guilty intent is an essential ingredient of a crime

and the principle is expressed in the maxim ‘actus non facit rum nisi mens sit rea’. This is a

general principle. However the legislature can always create an offence of absolute liability

or strict liability are justified and cannot be said to be unreasonable."

Section 138 was also put to test in Ramawati Sharma v. Union of India in light of Article

21 of the Constitution of India where the court held that;

"Mere taking of loan is not, thus, made punishable under certain circumstances and after

following certain conditions. It may not, therefore, be stated that the liberty of a person was

being curtailed by an arbitrary procedure or that such a provision is violative of Article 21 of

the Constitution"

In K.S. Anto v. Union of India the question of double jeopardy as enshrined in Article 20 (2)

in light of section 138 and section 420 of the Indian Penal Code where the court held that:

"Offences under section 138 of the Negotiable Instruments Act and section 420 of the Penal

Code are different and the ingredients are different and the ingredients are also different.

Convictions for different offences separately is not barred under article 20 (2). In spite of

prosecutions and convictions under section 138, there will be no constitutional bar in

prosecution for an offence punishable under section 420 of the Penal Code and a prosecution

will be if such an offence is made out."

Question of maintainability of criminal charge with a civil liability:

There is nothing in law to prevent the criminal courts from taking cognizance of the offence,

merely because on the same facts, the person concerned might also be subjected to civil

liability or because civil remedy is obtainable. Civil and criminal proceedings are co

extensive and not exclusive. If the elements of the offence under section 138 of the

Negotiable Instruments Act are made out on the face of the complaint petition itself,

enforcement of the liability through a civil court will not disentitle the aggrieved person from

prosecuting the offender for the offence punishable under section 138 of the Act

Conclusion

Though insertion of the penal provisions have helped to curtail the issue of cheque

lightheartedly or in a playful manner or with a dishonest intention and the trading community

now feels more secured in receiving the payment through cheques. However there being no

provision for recovery of the amount covered under the dishonoured cheque, in a case where

accused is convicted under section 138 and the accused has served the sentence but, unable to

deposit amount of fine, the only option left with the complainant is to file civil suit. The

provisions of the Act do not permit any other alternative method of realization of the amount

due to the complainant on the cheque being dishonored for the reasons of "insufficient fund"

in the drawer’s account. The proper course to be adopted by the complainant in such a

situation should be by filing a suit before the competent civil court, for realization/ recovery

of the amount due to him for the reason of dishonoured cheque which the complainant is at

liberty to avail of if so advised in accordance with law.

Case-law based discussion on Cheque Dishonor litigation

It may be a primal question that when Cheque Dishonor litigations are filed under

SS.406/420 in lieu of filing under S.138 of NI Act. To find the answer from our experience it

is known that Cheque Dishonor litigations have been brought before the Courts under

SS.406/420 in the situation when the statutory limitation period for filing a case under S.138

of NI Act elapse. The fact that a cheque issued has been dishonoured by itself does not

constitute the offence of cheating. An offence u/s.138 of the Negotiable Instrument Act is for

dishonor of a cheque simply for insufficiency of fund in any bank account. The rule of law

about the peremptory application of the special law in place of general law for trial of an

offence hardly applies when the offence are distinct under two laws. (Vide 49 DLR 464)

Whereas an offence u/s.420 PC for Cheating is a distinct offence. Mere issuing of the cheque

which is subsequently dishonoured does not make out an offence of cheating unless there are

allegations in the complaint that by taking the cheque the complainant sustained any damage

in his mind, body, reputation or property. In a case cited in 56 DLR 299 it was held:

The proceeding initiated against the accused for cheating cannot be said to be illegal in as

much as gave an undertaking in the agreement that in no way his cheques will be returned

uncashed when presented to the Bank— the offence is disclosed against the accused

petitioner u/s.420 PC.

For only dishonour of cheque cognizance cannot be taken for offence of cheating. It has to be

shown that there was dishonest intention of accused in issuing cheque. The post dated

cheque for payment of goods already delivered is only a promise to pay on a future date.

Breach, there of the dishonour of the cheque would only entail civil liability and not a

criminal offence, especially that there was no necessary averments on the complaint(1983 Cr

LJ 106 ker).

Issue of a cheque would not imply any representation that the drawer already had money in

the bank to cover the amount shown on the cheque, for he may have either authority to

overdraw or have an honest intention of paying in the necessary money before presentation of

the cheque for encashment(1987 Cr LJ 1446 Ori).

The dishonour of cheque for an antecedent debt does not amount to cheating. Where the

accused had paid the price against supply of goods by post-dated cheques and those cheques

were dishonoured on different dates and the bank account indicated that at no stage the

accused made any attempt to pay sufficient fund would lead to an inference that the accused

had cheated and committed an offence under section 420. But giving of a cheque in lieu of

money due with the knowledge that the drawer had no fund would not be cheating. In a case

cited in 54 DLR 445 it was held:

The cheque was issued by the accused knowing it well that there is no sufficient fund in his

account for encashment. Issuing of such cheque is by itself a criminal offence.

A cheque was returned unpaid by the bank under the remark “payment stopped by drawer”.

The complainant alleged that the cheque was dishonoured because the drawer of the cheque

had no sufficient balance or arrangement. The Court refused to quash the complaint. Issuing a

cheque without arrangement of sufficient funds may amount to cheating.(1992 Cr LJ 3080

Ker).

The deposit in current account by a customer of a Bank could not be said to have been

entrusted with the banker within the meaning of SS.405 and 409 PC. If the cheque is

dishonoured owing to the Bank’s inability to pay, the officer of the Bank is not guilty under

S.409 PC and the only remedy is to sue the Bank for the balances due and an action for the

dishonouring of cheque. (43 Cr.L.J. 451)

If a person presents a false bill or cheque to the Bank and Bank pays him the cash, it follows

that an offence of cheating under section 420 PC is committed by the accused. (1967

MLJ(Cr.)20)

Case study on bouncing of cheques from Bangladesh and Indian Jurisdiction

Case study-1 on Bouncing of cheques(of Bangladesh Jurisdiction):

Prior knowledge of rejection is an offence

High Court Division (Criminal Revisional Jurisdiction) Criminal Mis. Case No 9772 of 2003 Md Aminur Rahman Vs The State and another Justice Gour Gopal Saha and Justice Abdus Salam Mamun Date of Judgement: June 15, 2003

Background Gour Gopal Saha, J: This application under section 561A of the Code of Criminal Procedure is directed against the order dated 20-4-2003 passed by the Sessions Judge, Tangail in Criminal Revision No. 60 of 2003 rejecting the revisional application filed against the framing of a charge against the accused petitioner under section 420 of the Penal Code.

Short facts relevant for the purpose of the case are that on 18-12-2000 opposite party No. 2 as complainant filed a petition of Complaint in the Court of the Magistrate, Tangail alleging inter alia that the accused-petitioner took Tk 2,00000/= (Two lac) from him on promise to pay back the same on demand with usual interests but he did not pay back any money to the complainant in spite of repeated demands.

Eventually on being pressed by the complainant, the accused gave him on 20-6-2000 a cheque on the Janata Bank, Tangail Branch for Tk 20,000/= only towards mitigating the liability. The cheque was duly deposited in the account of the complainant but it was dishonoured on 20-6-2000 due to paucity of fund. Subsequently the complainant deposited the said cheque for encashment on 25-7-2000 and 27-10-2000, but as usual the cheque was dishonoured. Thereafter the complainant requested the accused to pay his dues but the accused refused to comply with its and eventually denied the transaction and thereby cheated the complainant.

After examining the complainant on solemn affirmation as required under section 200 of the Code of Criminal Procedure, the learned Magistrate took cognizance of the case and ultimately framed charge against the accused-petitioner under section 138 of the Negotiable Instruments Act.

Being aggrieved by the framing of charge as mentioned above, the accused petitioner preferred Criminal Revision No 44 of 2002 before the Sessions Judge, Tangail under sections 439A of the Code of Criminal Procedure. The learned sessions Judge by his order dated 25-4-2002 allowed the revision and sent the case back to the learned Magistrate for hearing on framing of charges.

On receiving the aforesaid order of the learned Sessions Judge, the learned Magistrate heard the parties at length and, on perusal of the materials before him, framed charge against the petitioner under section 420 of the Penal Code.

Against the aforesaid order of framing charge by the learned Magistrate, the accused-petitioner preferred Criminal Motion No 60 of 2003 before the Sessions Judge, Tangail under section 439A of the Code of Criminal Procedure. The learned Sessions Judge by his impugned order dated 20.4.2003 summarily rejected the petitioner's revisional application. It is against the aforesaid order 20.4.2003 that the petitioner has preferred this application before us under section 561A of the Code of Criminal Procedure.

Deliberation The learned advocate appearing for the accused-petitioner, submits that in view of provisions of section 138 of the Negotiable Instruments Act, the complainant was required to serve a notice upon the accused intimating him of the dishonour of the cheque within 15 days of the such dishonour, and that having not been done no criminal prosecution can be launched against the accused-petitioner. The learned Advocate further submits that the charges under section 138 of the Negotiable Instruments Act having failed, the framing of charge under section 420 of the Penal Code on the self same occurrence is illegal and it amounts to an abuse of the process of the Court and, consequently, the impugned order framing charge is liable to be quashed in the interest of justice.

The learned Advocate for the petitioner has placed before us the petition of complaint, the orders passed by the learned Sessions Judge as well as the impugned order passed by the learned Magistrate framing charge against the accused petitioner under section 420 of the Penal Code.

Section 420 of the Penal Code provides penalty for the offence of cheating as defined in section 415 of the Penal Code while section 138 of the Negotiable Instruments (Amendment) Act, 1994 provides punishment for issuance of a false cheque leading to its dishonour. A person who is a victim of cheating by the accused by way of a false cheque or otherwise is clearly entitled to proceed against the accused either under the provisions of the Negotiable Instruments Act or under the provision of section 420 of the Penal Code when elements of cheating are established.

Issuing a cheque knowing full well that it shall not be honoured carries with it distinct elements of deceit on the part of the author of the cheque and it renders him liable for prosecution for cheating. The victim of such a fraud has two remedies open to him - one is to file a criminal case under section 138 of the Negotiable Instruments Act and the other is to launch a criminal prosecution under section 420 of the Penal Code. An offence under section 138 of the Negotiable Instruments Act and an offence under section 420 of the Penal Code are two distinct offences, one independent of the other. The aggrieved party has thus the option to choose its remedy under either of the two penal provisions and the defence has no right to ask the complainant to elect a particular penal law that may suit its convenience.

On perusal of the materials placed before us, we are satisfied that there are sufficient materials on record for framing charge against the accused-petitioner under section 420 of the Penal Code. Facts disclosed in the case also make out a case under section 138 of the Negotiable Instruments Act. In such a case, it is all too open to the complainant to proceed under any of the two penal laws available to him.

Decision We are satisfied that the learned Magistrate duly applied his judicial mind into the facts and circumstances of the case and the materials on record and rightly framed charge against the accused-petitioner under section 420 of the Penal Code. The impugned order, therefore, does not suffer from any illegality or legal infirmity occasioning failure of justice. We find no substance in the submissions made by the learned Advocate for the petitioner. The application is rejected summarily.

Case study-2 on Bouncing of cheques(of Indian Jurisdiction) :

For invoking S.420 PC dishonest intention at time of giving cheque necessary

This decision basically states that merely because cheque gets dishonoured – won’t automatically give rise to liability u/s 420 for cheating – the prosecution/complainant has to prove that at the time of giving of cheque the intention of drawer was dishonest/fraudulent, and he did not intend to pay, but dishonestly induced the complainant to delivery valuable security/property.

Gauhati High Court

Manoranjan Haldar vs Mechfab Engineering Industries on 15 March, 1983

Equivalent citations: 1984 CriLJ 1265

ORDER

S.M. Ali, J.

1. This application under Section 401 and/or 482 Cr.P.C. is directed against the order dated 15.10.81 passed by Judicial Magistrate, Gauhati in Case No. 1666/81 and for quashing the proceeding pending in the court of the judicial Magistrate vide the aforesaid case.

2. The opposite party filed a complaint petition in the Court of the Chief Judicial Magistrate, Kamrup at Gauhati on 28.8.82, against the accused-petitioner alleging that the complainant is a partner of M/s. Mechfab Engg, Industries having its head office and place of business at Zoo Road, Gauhati and being a firm manufacturing steel articles. On 3.7.81 the accused-petitioner placed an order with the firm for supply of 27 Nos. of G.I. Tank valued at Rs. 64,500/-. In pursuance of which the accused-petitioner paid an advance amouts of Rs. 30,000/- to the firm by a Bank cheque D/-3.7.81 which was duly encased by the firm Against the order of supply the complainant firm issued 27 Nos. of M. Section Moulds for P.S.C. Poles and one G.I. Tank by the bill D/-5.9.81. 14 Nos. of P.S.C. Poles and G. I. Tank were accepted by the accused-petitioner from the firm on 14.8.81. Then 13 Nos. of M.S. Moulds, P.S.C. Poles were supplied to the accused-petitioner on 5.9.81 by the firing which the accused-petitioner accepted. It is further alleged that a sum of Rs. 10,000/- was subsequently paid by the accused-petitioner to the complainant through a Bank Cheque which was also

duly encased. For the balance amount of the dues the accused-petitioner issued a Bank Cheque DA 7.9.81 against his account at the Central Bank of India, Fancy Bazar Branch, Gauhati. The complainant presented the cheque to the Bank on 7.9.81 but it was dishonoured by the Bank. This fact was brought to the notice of the accused-petitioner who however apologized for the firm having not received the payment of the cheque money. The accused-petitioner assured the complainant that the cheque would be honoured if presented to the Bank after a couple of days. The complainant again presented the cheque on 24.9.81 to the Bank but’ the Bank informed that the accused petitioner by his letter D/- 24.9.81 directed the Bank to stop payment to the complainant. On enquiry from Bank the complainant came to know that the accused-petitioner bad only sum of Rs. 700/- at his credit at the Bank. Thereafter the complainant demanded the sum of Rs. 24,500/- from the accused-petitioner on several occasions but the accused ultimately refused to make payment of the dues on 14.10.81. The allegation is therefore that the accused-petitioner with full knowledge that he had no money in the Bank to satisfy the dues of the complainant issued the cheque and thus had the intention to deceive the complainant. Thus the accused-petitioner dishonestly induced the complainant to, deliver the articles with the intention to cheat the complainant.

3. The learned Chief Judicial Magistrate transferred the petition of complaint to the I learned Judicial Magistrate who examined the complainant on oath and finding that a I prima facie case Under Section 420 IPC was made out against the accused, issued, warrant of arrest against the accused with a bail of Rs. 5000/-.

4. On 17.11.81 the accused-petitioner I appeared before the court and was enlarged on a bail of Rs. 3000/- with one surety.

5. The case remains pending in the court of the learned Judicial Magistrate, who has not yet started trial.

6. It is to be seen whether any offence of cheating has been made out as per the complaint. In his examination under Section 200 Cr.P.C. the complainant (the partner representing the firm) disclosed that he met the accused-petitioner 2/4 days after the Bank had issued him a memo. Showing the reason of not honouring the bank cheque and that ultimately on 14.10.81 the accused informed him that he would not make any payment. Learned counsel for the petitioner pointed out that the facts of the complaint do not constitute the ingredients necessary for the offence of cheating, in any form. Section 415 IPC defines cheating as follows:

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 so deceived and which act or omission causes or is likely to cause the damage or harm to that person in body, mind, reputation or property is said to cheat.

Explanation – The dishonest concealment of facts is a deception within the meaning of this section.

Section 420 IPC says:

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….

It is therefore clear that the intention to cheat must have been there with the accused at the time of the initial transaction. Where the accused had an intention to pay against delivery of goods, I the fact that he did riot pay would not convert the transaction into one of cheating. On the other hand, if he had no intention to pay but merely expressed his intention to pay in order to induce the complainant to part with the goods, then in that case cheating would be established. Then again, if there be no intention to, cheat at the time when promise of payment is made, subsequent inability to pay or perform the promise will not amount to any offence. It is of course settled principle that intention of an accused may be judged by his subsequent act or conduct. But still such conduct or act cannot be the sole criterion to judge his intention at the time of initial representation. There are two main Elements of offence of cheating, namely, deception and dishonest inducement to do or omit to do anything. At the same time, there deception is not a criminal offence nor is mere dishonesty so. In between the two conceptions there is yet a line though very thin giving rise to breach of contract for which remedy lies in a civil action.

7. In the light of the aforesaid principles of law we have to examine whether any criminal offence has been made out by the facts of the complaint. Here admittedly the accused made a payment of Rs. 40,000/- only to the complainant against the articles received by him from the firm. For the balance of the dues he issued a cheque D/-7.9.81 which though post dated was accepted by the complainant for encashment. When the Bank first dishonoured the cheque and as the matter came to the knowledge of the accused-petitioner he apologized and assured that in future the cheque would be honoured. That means he would be making necessary deposit in the Bank for encashment of the cheque. The accused-petitioner had only a sum of Rs. 700/- on his account in the Bank. It is stated in the complaint that on some subsequent occasions also the accused-petitioner assured the complainant that the payment would be made. Ultimately on 14.10.81 he refused to make any payment. These are the circumstances

of the case and on the basis of these circumstances, it cannot be said that at the time when order for supply of the articles was placed by the accused-petitioner, he had any dishonest intention to deceive the complainant. There is scope to think that due to some subsequent developments, taking place between the parties, the accused-petitioner might have changed his mind for which he refused the payment. As said before, it is the established principle of law that the dishonest intention at the time of the initial transaction must appear to be clear. The subsequent conduct of the accused cannot make the transaction amount to cheating. The submission of the learned Counsel for the opposite parties that the facts of the case indicate that the accused-petitioner in order to cover up his dishonest intention made partial payment and that it was in his mind that after receiving the entire lot of the articles he would not make the balance payment thereby having some wrongful gain and that such dishonest intention to deceive the complainant was there with the accused from the very start of the deal, cannot be accepted in view of the facts of the case. The knowledge of the accused-petitioner that he had only a sum of Rs. 700/- in the Bank, whereas the Bank Cheque issued by him on 7.9.81 was for a sum of Rs. 24,500/- also by itself does not lead to the inference that he had the dishonest intention of cheating the complainant at the time when he placed the order for supply of the goods or at the time when he accepted the goods. As said before, there should be circumstances showing in a clear way that the accused had such a dishonest intention at the initial stage. As said before subsequent refusal to pay the balance amount cannot convert the transaction into cheating. It is found that the matter is purely of civil nature. It is a case of breach of contract. The complainant may take recourse to civil action if he so likes. But the criminal proceeding as it is in the present form would be merely a futile exercise.

8. The result is that the petition is allowed. The impugned order and the proceeding are hereby quashed. No order as to costs.

Appendix

Appendix



• Offences of Criminal Breach of Trust, Cheating, Criminal Misappropriation and Theft:

Mode of Taking Of Property(honest/dishonest)- Existence of consent of the owner(with /without)

Table

• Criminal Breach of Trust Vs Cheating

• Criminal Breach of Trust Vs Criminal Misappropriation

• Criminal Breach of Trust Vs Theft

Appendix II. Some specimen of Judicial Enquiry on the litigation involving the allegations of Criminal

Breach of Trust and/or Cheating.



An easy method of differentiating between the offence of theft, cheating with delivery of property, criminal misappropriation and criminal breach of trust is to find out whether the original taking was honest or dishonest and whether it was with the consent of the owner or without it. In theft the original taking is without honesty and without consent of the owner, and in criminal breach of trust it is with both. In obtaining property by cheating, the taking is without honesty but with the consent of the owner and in criminal misappropriation it is honest taking without consent of the owner. The comparison can be well understood by pondering over the following tabular information chart:

Offences of Criminal Breach of Trust, Cheating, Criminal Misappropriation and Theft:

Mode of Taking Of Property(honest/dishonest)- Existence of consent of the owner(with /without) Table

Name of the Offence Mode of Taking Of

Property(honest/dishonest)

Existence of consent of the

owner(with /without)

Criminal Breach Of Trust Honest taking of property With consent of owner

Theft Dishonest taking of property Without consent of owner

Cheating Dishonest taking of property With consent of owner

Criminal Misappropriation Honest taking of property Without consent of owner

Criminal Breach of Trust Vs Cheating

Criminal Breach of Trust Cheating

In Criminal Breach of Trust the offender is lawfully entrusted with the property, but he dishonestly misappropriates or converts to his own use that property, or suffers any other person so to do.

In Cheating possession of the property is obtained by practising deception or fraudulent means.

In Criminal Breach of Trust there is the conversion of property held by a person in a fiduciary relationship.

Cheating involves practicing of deception for acquiring property. There is neither fiduciary relationship nor any conversion of property.

In Criminal Breach of Trust the property may be either moveable or immoveable.

In Cheating the property may also be either immoveable or moveable.

Criminal Breach of Trust Vs Criminal Misappropriation

Criminal Breach of Trust Criminal Misappropriation

In Criminal Breach of Trust the offender is lawfully entrusted with the property and he dishonestly misappropriates the same, or willfully suffers any other person to do so, instead of discharging the trust attached to it.

In Criminal Misappropriation the property comes into the possession of the offender by some casualty or otherwise and he afterwards misappropriates it.

In Criminal Breach of Trust there is contractual relationship

In Criminal Misappropriation there is no contractual relationship.

In Criminal Breach of Trust there is conversion of property held in a fiduciary character.

In Criminal Misappropriation there is the conversion of property coming into possession of the offender anyhow.


In Criminal Misappropriation the property can only be moveable.

A Breach of Trust includes Criminal Misappropriation.

But the converse is not always true.

Criminal Breach of Trust Vs Theft

Criminal Breach of Trust Theft

In Criminal Breach of Trust the property is given on trust or received on one’s behalf and instead of discharging the trust, it is dishonestly misappropriated or used or disposed of in violation of the law. The owner here parts with something in good faith but the person who takes it keeps the thing for himself.

In Theft there is a wrongful taking of a moveable

property out of the owner, i.e., by stealth without

the owner’s knowledge.

In Criminal Breach of Trust the offender prior to the offence is himself in possession of the property and the offence is completed when he dishonestly converts the same to his own use.

In Theft there is no prior lawful possession; the

offence is completed as soon as the property is

dishonestly taken away.


In Theft the property involved is a moveable

property.

Criminal Breach of Trust is ordinarily punished with the same severity as theft, but where there is a greater degree of trust as in the case of carrier or a clerk or a servant entrusted with his master’s property or in the case of a public servant or banker, heavier punishment is provided under sections 407, 408 and 409 of the Penal Code.

Cheating without proprietary element is created by

section 417 but Cheating with proprietary element

is created by section 420. The punishment of these

two type of cheating are not alike. Besides, the

offence of cheating u/s.417 is not cognizable while

offence of cheating u/s.420 is cognizable.

Appendix II. Some specimen of Judicial Enquiry on the litigation involving the allegations

of Criminal Breach of Trust and/or Cheating.

Specimen JE Report-1

IN the Court of Judicial Magistrate

In Presence : Mr. M. XY

Re Kotoali Complaint No.253/2010

(Abul Monsoor Vs. Johor Caree)

Concerned Penal Sections of the Complaint: 406/420 of the Penal Code,1860

Date of Forwarding: 27.06.2010

RReeppoorrtt ooff tthhee JJuuddiicciiaall IInnqquuiirryy

I . Summary of the Complaint

The complainant complained in the body of her complaint that on 02.01.2009 the accused

person borrowed BDT.1,17,000 from him in presence of some witnesses and promised to

repay within two months. After expiration of the promised period the complainant on

27.03.2010 demanded his money but he refused to repay and as such committed the

offence of ‘Criminal breach of trust’ as created by Section 405 and Section 406 of the Penal

Code and the offence of ‘Cheating’ as created by Section 415 and Section 420 of the Penal

Code.

II. Evaluation of the recorded deposition of Judicial Witnesses

JW1, Abul Monsoor said in his testimony that he is the complainant of this case. He

described the fact of the complaint in the verbatim mode. He added that he had previous

transaction of same kind with the same person .

N.B. It is to be doubtfully observed here that he clearly mentioned the mode of

taking the money by the said accused persons as borrowed money. So there was no

entrustment upon the accused persons regarding the said sum.

JW2, Md. Jalal Uddin , said in his testimony that he is the local U.P. member . He affirmed

that the accused persons of this case took money from the complainant but ultimately

refused to repay. By this act the accused person dishonestly misappropriated the money

taken.

JW3, Mofizuddin said in his testimony that he is one of the neighbors to the complainant.

His testimony supported that of the complainant.

JW4, Md. Fozlu said in his testimony that he is one of the neighbors to the complainant. His

testimony also supported that of the complainant.

JW5, Usman Ali Hafez said in his testimony that he is one of the cousins to the complainant.

His testimony also supported that of the complainant.

JW6, Md. Khokon Mia said in his testimony that he is one of the nephews to the

complainant. His testimony also supported that of the complainant.

III. Findings of the Judicial Inquiry

Upon considering the facts and circumstances of this complaint case followed by the

perusal of the complaint, depositions recorded and the papers appended to the case-

record the following points appear to me which paved the way to the findings of this

judicial inquiry:

1. It appears to this Court that admittedly no entrustment of property has been made

to the accused person who took the alleged sum as transfer money ,as such, the

prime element of misappropriation of entrustment is absent and as such no

proceeding under Section 406 is maintainable against the accused persons.

Furthermore, no elements of the offence of ‘Criminal breach of trust’ as created by

Section 405 and Section 406 of the Penal Code was found in course of this inquiry.

2. It is to be argued that Section 415 of the Penal Code which defines the offence of

‘Cheating ’ spelt out that there must be an initial deception in any given fact to

attract this offence the punishment of which is enunciated in Section 420. Thus, for

bringing this case within the purview of this section the test is whether there was a

promise of repayment on the part of the accused person of the alleged loan-money

but was not so made. After analyzing the documentary evidence on record and the

oral evidence recorded it appears to me that there was such a promise to repay but

the same was violated by refusing to repay. So, it may be inferred that there was

initial intention of deception. Consequently elements of the offence of ‘Cheating ’

have been found in this case.

THEREFORE, upon the judicial scrutiny made above this Court in its inquiring capacity has

explored the prima facie truth of the commission of offence of ‘ Cheating ’ ;

SAVE FOR, other offences of ‘Criminal breach of trust’ that are complained but appeared

to be prima facie not reliable.

(( MM.. XXYY ))

JJuuddiicciiaall MMaaggiissttrraattee

JJuuddiicciiaall MMaaggiissttrraaccyy DDIISSTTRRIICCTT ZZ


IN THE COURT OF JUDICIAL MAGISTRATE

In Presence of Mr. M. XY Judicial Magistrate

Re Kotoali Complaint No.508/2010

Concerned Penal Sections: 406/420/109 of the Penal Code,1860


A. Allegation of the Complainant in the light of the complaint petition

• Date and time of occurrence: 16.02.2010, corresponding to 4th

of Falgun,

1416 B.S. , Tuesday, and the day of refusal 11.06.2010, corresponding to 28th

Joishtho, 1417, Friday at 8 pm.

• Place of occurrence: At the office-room of some ‘Insaaf Multipurpose Co-

operative Society Ltd, District Z’ .

• Manner of the accused persons: All the accused persons made a

‘Bainapatra’(Contract for sale) in relation to the land owned by the

complainant to buy with BDT.20 lacs with payment of BDT.5 lacs as down-

payment on which they deceived her by taking her signature on it without

making her known about writing in it the double of the amount of land they

agreed to buy. Afterwards on the date of occurrence all of the accused

persons with fraudulent intention boldly argued that she had agreed to sell

the amount which was written on that document and threatened her to give

the possession and title by registered ‘Saaf-kabala’ soon . This way they have

committed the alleged offences.

• Offences alleged to have been committed by the accused persons:

Alleged offence(s)

Alleged offender(s)

1.Criminal Breach of Trust All the accused persons

2.Cheating and dishonestly inducing deliver of property

3.Abetment of the aforesaid offences

All the accused persons

All the accused persons

B. Evaluation of the recorded deposition from Judicial Witnesses

JW1, Mst. Shazeda Khatun said in her testimony that she is the complainant of this case. He

described the fact of the complaint in the verbatim mode except anything amounting to the

offence of ‘criminal breach of trust’ and ‘abetment’. It is to be noted that the complainant

alleged that she gave the signature on the document in good faith. She further added that

the accused persons has put some ‘maati’(earth) on it despite her objection . It appears

from the demeanor of the witness that that she is in grave fear that if he does not give by

way of registration to the opposite party of the deed the demanded amount of land the

accused persons shall dispossess her from that land and grab her landed property criminally.

Hence is the case.

JW2, Mst. Popie said in her testimony that she is the daughter of the complainant. She

added that the accused persons deceitfully took the signature of her mother on the

instrument to grab their land illegally.

C. Findings of the Judicial Inquiry




judicial inquiry:

1. It is to be argued that Section 415 of the Penal Code which defines the offence

of ‘Cheating ’ spelt out that there must be an initial deception in any given fact to

attract this offence the punishment of which is enunciated in Section 420. Thus,

for bringing this case within the purview of this section the test is whether there

was a primary intention on the part of the accused persons to deceive the

complainant’s side by the alleged overt act. Hence, after analyzing the

documentary evidence on record and the oral evidence recorded it appears to me

that there was such a fraudulent intention regarding the making of a false

document about the land. Moreover, the act of concealment of the actual

amount of land to be mentioned in and obtaining signature of the complainant

cunningly on the deed of ‘Bainapatra’ indicates ulterior intention of the said

accused persons. So it may be inferred that there was initial intention of

deception. Consequently elements of the offence of ‘ Cheating ’ have been

found in this case.

2. It appears to this Court that admittedly no entrustment of property has been

made to the accused person who took the alleged sum as loan ,as such, the prime

element of misappropriation of entrustment is absent and as such no proceeding

under Section 406 is maintainable against the accused person. Furthermore, no

elements of the offence of ‘Criminal breach of trust’ as created by Section 405

and Section 406 of the Penal Code was found in course of this inquiry.

3. Finally, it is evident that the overt act is done by all the accused persons. It was

not a fact where I found any person indirectly participating in the commission of

the offence by any mode of ‘Abetment’. All the accused persons were present

and they participated in the commission of the offence when the offences was

committed. Consequently elements of the offence of ‘ Abetment ’ have not been

found in this case.

THEREFORE, upon the judicial scrutiny made above this Court in its inquiring capacity has

explored the Prima facie truth of the commission of offences under Section 420 of the

Penal Code by the alleged accused persons;

excluding, other offences under sections 406/109 of the Penal Code that are complained

but appeared to be prima facie not reliable.

(( MM.. XXYY )) JJuuddiicciiaall MMaaggiissttrraattee



In the Court of Judicial Magistrate

In the Matter of Inquiry into Trishal complaint No.288/2010

Concerned Penal Sections: 406/420 of the Penal Code,1860



A. Allegation of the Complainant in the light of the complaint petition

• Date and time of occurrence: 12.01.2010, corresponding to 29th of Poush,

Tuesday, assumingly at 10 am and the day of refusal 02.02.2010,

corresponding to 20th Magh, Friday assumingly at 10 am .

• Place of occurrence: At the premises of Sub-Registrar office of Trishal

Upazilla, District Z .

• Offences alleged to have been committed by the accused person:

Alleged offence(s) Alleged offender(s)

1.Criminal Breach of Trust The accused person

2.Cheating and dishonestly inducing deliver of property The accused person


JW1, Md. Abdul Motin (Koddus) Khan said in his testimony that he is the complainant of this case. He

described the fact of the complaint in the verbatim mode except anything amounting to the offence

of ‘criminal breach of trust’. It is to be noted that the complainant alleged that he gave the money

amounting to BDT.6,00,000 on the document in good faith. He further added that the accused person

execute the sale-deed but did not register the said document rather defrauded him by selling the land

unlawfully to some other person. It appears from the demeanor of the witness that that he is in grave

fear that if he does not get the land by way of registration from the opposite party of the deed he will

be pauper in true sense. Hence is the case.

JW2, Murshida Khatun said in her testimony that she is the wife of the complainant. Mentioning the

date and time of the occurrence in conformity with the complaint petition she added that the accused

person deceitfully took the sum of BDT. 6 lacs from them on the instrument which was not

registered as promised by the accused person.

JW3, Arifa Khatun and JW4, Mahmuda Khatun said in their testimony that they are the daughters of

the complainant. They reproduced what JW2 said.

JW5, Abul Hossen said in his testimony that he is the neighbor of the complainant. Mentioning the

date and time of the occurrence in conformity with the complaint petition he added that the accused

person deceitfully took the sum of BDT. 6 lacs from the complainant on the instrument which was not

registered as promised by the accused person.





Judicial Inquiry:

1. It is to be argued that Section 415 of the Penal Code which defines the offence of ‘Cheating ’

spelt out that there must be an initial deception in any given fact to attract this offence the

punishment of which is enunciated in Section 420. Thus, for bringing this case within the

purview of this section the test is whether there was a primary intention on the part of the

accused person to deceive the complainant’s side by the alleged overt act. Hence, after

analyzing the documentary evidence on record and the oral evidence recorded it appears to

me that there was such a fraudulent intention regarding the execution but not registration of

a document about the land. Moreover, the act of alienating the said land to person other than

the complainant from whom the consideration money was taken cunningly on the deed

indicates ulterior intention of the said accused person. So it may be inferred that there was

initial intention of deception. Consequently elements of the offence of ‘ Cheating ’ have

been found in this case.

2. It appears to this Court that admittedly no entrustment of property has been made to the

accused person who took the alleged sum as consideration ,as such, the prime element of

misappropriation of entrustment is absent and as such no proceeding under Section 406 is

maintainable against the accused person. Furthermore, no elements of the offence of

‘Criminal breach of trust’ as created by Section 405 and Section 406 of the Penal Code

was found in course of this inquiry.

THEREFORE, upon the judicial scrutiny made above this Court in its inquiring

capacity has explored the Prima facie truth of the commission of offence under

Section 420 of the Penal Code by the alleged accused person;

excluding, other offence under section 406 of the Penal Code that was complained

but appeared to be prima facie not reliable.





In the Matter of Inquiry into

KOTOALI Complaint No.660/2010

(Mst. Hazera Khatun@Mongolee V. Md. Idris Ali and 4 Ors.)

Concerned Penal Sections: 406/420/34 of the Penal Code, 1860


____________________________________________________________________________________________________________

A. Allegation of the accuser in the light of the complaint petition

• Date and time of occurrence: The 1st day of taking the portion of money in consideration

of selling the land by the accused was 04.01.2008 AD, corresponding to 21st of Poush,1414 BS,

Friday, assumingly at 10 am and the 2nd

day of taking the rest of the money as consideration

of selling the land by the accused was 08.11.09 AD akin to 24th

of Kartrik,1416 BS, Sunday

assumingly at 12 pm and the day of refusal 06.08.2010 AD, corresponding to 22nd

Srabon,1417BS, Friday, assumingly at 10 am .

• Place of occurrence: The homestead of the accused persons.


The determining factors as per depositions recorded from JW1, JW2…………….. JW6 were as

follows:

• The complainant described the fact of the complaint in a verbatim mode.

• Almost all the witnesses rightly mentioned the date and time of the occurrence with

necessary corroboration to the complaint and the complainant’s deposition.


Upon considering the facts and circumstances of this complaint case followed by the perusal of

the complaint, depositions recorded and the papers appended to the case-record the following

points appear to me which paved the way to the findings of this Judicial Inquiry:


spelt out that there must be an initial intention of deception in any given fact to attract this

offence the punishment of which is enunciated in Section 420. Thus, for bringing this case

within the purview of this section the test is whether there was a primary intention on the part

of the accused person to deceive the complainant’s side by the alleged overt act. Hence, after

analyzing the documentary evidence on record and the oral evidence recorded it appears to

me that there was such a fraudulent intention regarding the taking of money on a document

about the transfer of the alleged land. Moreover, the act of refusing the registration of the

same transfer in favour of the complainant indicates ulterior intention of the said accused

person no.1, Md. Idris Ali. So it may be inferred that there was initial intention of deception.

Consequently elements of the offence of ‘ Cheating ’ have been found in this case.


accused persons who took the alleged sum as a consideration for selling his landed

property ,as such, the prime element of dishonest misappropriation of entrustment is absent

and as such no proceeding under Section 406 is maintainable against the accused person.

Furthermore, no elements of the offence of ‘Criminal breach of trust’ as created by

Section 405 and Section 406 of the Penal Code was found in course of this inquiry.

5. Finally, as regard to acts done by all the accused persons in furtherance of common intention

spelt out in Section 34 of the Penal Code, I am quite convinced that no nexus between

accused persons or a coalition of action can be inferred from facts and circumstances of the

case furthering or facilitating in committing the offences as mentioned above.

THEREFORE, upon the judicial scrutiny made above this court in its inquiring capacity has explored the Prima

facie truth of the commission of offence under S.420 of the Penal Code by the alleged accused person

no.1 ,Md. Idris Ali .

On the contrary, other offence under SS.406/34 of the Penal Code that was complained but

appeared to be prima facie not reliable.





In the matter of inquiry into

KOTOALI Complaint Petition No.516/2010

(Md. Abdur Razzak Khan V. Md. Abul Hossen and another)

Concerned Penal Sections : 406/420/506(II)/109/34 of the Penal Code, 1860


____________________________________________________________________________________________________________

A. Allegation in the light of the complaint

• Date and time of occurrence: The 1st day of taking the portion of money in consideration

of giving a job to the complainant’s relatives was 19.07.2009 AD, and the day of refusal

04.06.2010 AD, corresponding to 21st Joishtho,1417 BS, Friday, assumingly at 11 am .

• Place of occurrence: At the rented home of the complainant in Z town.

B. Evaluation of the depositions of JWs

The determining factors as per depositions recorded from JW1, JW2…………….. JW5 were as

follows:


• Almost all the witnesses rightly mentioned about the occurrence with necessary

corroboration to the complaint and the complainant’s deposition.


Upon considering the facts and circumstances of this complaint case followed by the perusal of the

complaint, depositions recorded and the papers appended to the case-record the following points

appear to me which paved the way to the findings of this Judicial Inquiry:



offence the punishment of which is enunciated in Section 420. Thus, for bringing this case within

the purview of this section the test is whether there was a primary intention on the part of the

accused person to deceive the complainant’s side by the alleged overt act. Hence, after analyzing

the documentary evidence on record and the oral evidence recorded it appears to me that there

was such a fraudulent intention regarding the taking of money on a contract in consideration of

giving a job to the complainant’s relatives. Moreover, the act of refusing to pay back the alleged

sum after failing to give any job as promised by the accused persons to the relatives of the

complainant indicates ulterior intention of the said accused persons. So it may be inferred that

there was initial intention of deception. Consequently elements of the offence of ‘ Cheating ’

have been found in this case.


accused persons who took the alleged sum as a consideration for selling his landed property ,as

such, the prime element of dishonest misappropriation of entrustment is absent and as such no

proceeding under Section 406 is maintainable against the accused person. Furthermore, no

elements of the offence of ‘Criminal breach of trust’ as created by Section 405 and Section

406 of the Penal Code was found in course of this inquiry.

3. Finally, as regard to acts done by all the accused persons in furtherance of common intention

spelt out in Section 34 of the Penal Code, I am quite convinced that a nexus between accused

persons or a coalition of action can be inferred from facts and circumstances of the case

furthering or facilitating in committing the offences as mentioned above.

4. Moreover, it is also apparent that the accused no. 2 has aided the cheating committed by the

accused no. 1 and in this way he has abetted the offence created by SS. 415 and 417 of the

Penal Code.(vide S.109 of Penal Code)

THEREFORE, upon the judicial scrutiny made above this court in its inquiring capacity has

explored the Prima facie truth of the commission of offence under SS. 417/109/34 of the

Penal Code by the alleged accused persons. On the contrary, other offences under

SS.406/420/506((II) of the Penal Code that were complained appeared to be prima facie not

convincing. (( MM.. XXYY ))







Valuka Complaint Petition No.1671/2010

(Md. Saiful Islam V. Mister and 3 Ors.)

Concerned Penal Sections : 380/406/420/506(II)/ 109 of the Penal Code, 1860

Present : Mr. M. XY Judicial Magistrate

A. Allegation in the light of the complaint

• Date and time of occurrence: The day of the alleged criminal act by the accused

persons was 17.02.2010 AD, at 09:00 am.

• Place of occurrence: At the homestead of the complainant.


The determining factors as per depositions recorded from JW1 ………………JW4 were as follows :


• Admittedly both the contending parties have several legal-disputes prior to this occurrence .

• Not all the witnesses rightly mentioned about the occurrence with necessary corroboration

to the complaint and the complainant’s deposition.


Upon considering the facts and circumstances of this complaint case followed by the perusal

of the complaint, depositions recorded and the papers appended to the case-record the

following points appear to me which paved the way to the findings of this Judicial Inquiry:



offence the punishment of which is enunciated in Sections 417. Thus, for bringing this case

within the purview of this section the test is whether there was a primary intention on the part

of the accused persons to deceive the complainant by the alleged overt act. Hence, after

analyzing the oral evidence recorded it appears to me that there was no such fraudulent

intention on the part of the accused persons. Consequently elements of the offence of

‘Cheating’ have not been found in this case. So, arguably, elements of the offence u/s.420

was not found in the present fact.


accused persons , as such, the prime element of dishonest misappropriation of entrustment is

absent and as such no proceeding under Section 406 is maintainable against the accused

person. Furthermore, no elements of the offence of ‘Criminal breach of trust’ as created

by Section 405 and Section 406 of the Penal Code was found in course of this inquiry.

8. It is apparent to me that, regarding the dishonest taking of money and other valuables belong

to the complainant without his consent the accused persons may have committed the

offence as enshrined in Sec.380 of the Penal Code. But it is suspicious that the complainant

did not bring the allegation of theft, criminal breach of trust ,cheating or abetment to those

offences against his wife though the complainant alleged her participation in the said crimes

as well as subsequent criminal intimidation alleged to have been committed by her. It is to be

observed in the complaint petition that she was made a witnesses to the fact-in-issue despite

her participation in the alleged crimes. It is also dubious as to why the complainant’s wife was

not brought before the court to support the complainant’s case as a witness. Moreover,

none of the witnesses deposed that they witnessed the said accused persons to commit

the offence of theft in the dwelling place of the complainant.

9. Moreover, it is not established by the complainant and other JWs that how and in what

manner other accused persons has aided the offence committed by some of the accused

persons. So in course of this inquiry it was not primarily proved that any accused person has

committed the offence of abetment. (vide S.109 of the Penal Code)

10. But arguably it is also apparent to this Court that admittedly no criminal act or omission

exists in the present fact that may amount to any of the offences created by SS. 380/506(II)

of the Penal Code and as such no proceeding under these provisions are maintainable

against the accused persons.

THEREFORE,

upon the judicial scrutiny made above this court in its inquiring capacity has

explored that this case is prima facie not credible .





In presence of Judicial Magistrate

Mr. M. XY


Tarakanda Complaint Petition No. 93/2011

(MD. Rukonuddin FAKIR V. MD. Mahtabuddin TALUKDAR)

Concerned Penal Sections : 406/420 of the Penal Code, 1860.

A. Allegation in the light of the Complaint

Type of the alleged offences: Commission of offences of Criminal Breach of Trust

and/or Cheating in relation to the alleged amount of BDT.1,20,000 belongs to

Taldighi Bohumukhi High School alleged to have been committed by the criminal act

of dishonest misappropriation of the alleged sum by the accused person no.1 which

was entrusted to him as the Chairman of the managing committee of the said school.

Date and time of occurrence: The days of the alleged criminal acts by the accused

persons were 08.01.11 (date of monetary transaction) at 11:00 am and 22.04.11(date

of refusal to repay) at 11:00 am.

Place of occurrence: The alleged offences were committed at the premises of

Taldighi Bohumukhi High School and area adjacent to it situated at Taldighi of

Tarakanda Thana, District Z.

Concerned Penal Sections : 406/420 of the Penal Code, 1860.


The determining factors of this criminal dispute as per depositions recorded from JW1 to

JW6 were as follows:

• The complainant as JW1 described the fact of the complaint in a verbatim mode.

• It appears from the testimonies that almost all the witnesses rightly mentioned the

date and time of the occurrence with composed corroboration to the complaint

version and the complainant’s deposition.

C. Points of Determination

• In this Judicial Enquiry it is to be inquired into whether the present fact

discloses the offences of—

a. Cheating, and/or

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b. Criminal Breach of Trust.

• Whether the alleged accused person of this case and are eligible to be

prosecuted on the basis prima facie case(if any) u/SS. 406/420 of the Penal

Code, 1860.

D. Analysis of facts and laws involved in the present case

Having considered the facts and circumstances of this complaint case followed by

the perusal of the complaint, depositions recorded and the papers appended to the

case-record the following points appeared to this Court which paved the way to the

findings of this Judicial Inquiry :

1. Firstly, after analyzing depositions it appears to this Court that the alleged amount of

money amounting to BDT.1,20,000 which was gained by the Taldighi Bohumukhi High

School Managing Committee as a part payment of the consideration emanated from a

contract between it and a Dhaka based construction farm named ‘Reza Construction’ was

received by the accused person MD. Mahtabuddin TALUKDAR as the Chairman of

Bohumukhi High School Managing Committee. It is admitted that the alleged sum was also

entrusted to him for the purpose of restructuring the field of Taldighi Bohumukhi High

School which was being used by ‘Reza Construction’ at the contract period. But without

doing that he dishonestly misappropriated the money in his personal purpose. Now, whether

this act constitutes crime of Criminal Breach of Trust is the question which we yearn for

knowing to reach in any findings of this Judicial Enquiry.

To that end, firstly, we can recollect the definition of Criminal Breach of Trust as found in S.405

of the Penal Code :

Criminal Breach of Trust defined:

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 willfully suffers any

other person so to do, commits "criminal breach of trust".

Here in the given fact the act of admittedly of entrustment of property has been

made to the accused person , as such, the prime element of dishonest

misappropriation of entrustment is present that is why proceeding under Section 406

is maintainable against the accused person. Furthermore, elements of the offence

of ‘Criminal breach of trust’ as created by Section 405 and Section 406 of the

Penal Code was found in course of this inquiry.

134

2. Secondly, after analyzing the motive of the accused person and manner of the

commission of the offences it appears to this Court that the alleged sum of the

complainant’s school committee was corruptly converted to his own use by accused

no.1. Now, whether this act constitutes the crime of Cheating is the question which

we yearn for knowing to reach in any findings of this Judicial Enquiry.

To that end, relevant it will be, for us to recollect the definition of Cheating as found in S.415 of

the Penal Code :

Cheating defined: 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".

Here in the given fact the act of dishonest misappropriation of the alleged sum, so

far as the assessment of this Court is concerned, amounting to the commission of the

offence of Criminal Breach of Trust but not Cheating. It is to be argued that Section

415 of the Penal Code which defines the offence of ‘Cheating ’ spelt out that there

must be an initial intention of deception in any given fact to attract this offence the

punishment of which is enunciated in Sections 417. Thus, for bringing this case within

the purview of this section the test is whether there was a primary intention on the

part of the accused person to deceive the complainant by the alleged overt act.

Hence, after analyzing the oral evidence recorded this Court is satisfied that in the

present complaint there is hardly any cogent evidence that can bring in the light a

fraudulent initial intention on the part of the accused person no.1 because his

criminal act became matured after his dishonest misappropriation of the alleged sum

and by his subsequent refusal to reimburse the same in favour of the fund of Taldighi

Bohumukhi High School Managing Committee. Consequently elements of the

offence of ‘Cheating’ have not been found in this case. So, arguably, elements of

the offence u/s.417 was not found in the present fact.

Here, it is also to be inquired into whether the present fact discloses the following offence of

Cheating and dishonestly inducing delivery of property —

Cheating and dishonestly inducing delivery of property (S. 420 PC)

This offence is defined and created respectively by S.415 and punished by S.420 of

the Penal Code. The given fact of this case, as the evidence on record suggest, is

dearth of disclosing any offence of this kind since it is clear that the alleged act of

cheating by the accused persons does not dishonestly induced the complainant or

anybody from his school committee to deliver any property to any person. As such

proceeding under S. 420 is not maintainable against the accused person.

135

E. Findings of the Judicial Inquiry

THEREFORE, upon the judicial scrutiny made above this Court in its inquiring capacity

has explored the prima facie case by ascertaining the truth of the commission of

offence under S. 406 of the Penal Code by the alleged accused person.

On the contrary, other offence under S. 420 of the Penal Code that was complained

appeared to be prima facie not credible. Because, arguably it is sufficiently evident to

this Court that no criminal act or omission exists in the present fact that may amount to

the offence created by S. 420 of the Penal Code and as such no proceeding under this

provision is maintainable against the accused person.

F. Recommendation

Upon the judicial discretion of the concerned Cognizance Court, and for the purpose of facing the

trial on the basis of the prima facie case, the process may be issued against the alleged accused

person as per the law and procedure for the ends of justice.

(( MM.. XXYY ))






In the matter of judicial inquiry into

Gaffargaon Complaint Petition No.898/2011

(Md. Abul Hossain V. Md. Shamsul Haque and 3 Ors.)

Concerned Penal Sections : 406/420/506/ 109 of the Penal Code, 1860

Present : Mr. M. XY Judicial Magistrate

A. ALLEGATION IN THE LIGHT OF THE COMPLAINT • Date and time of occurrence: The days of the alleged criminal acts by the accused

persons were 15.10.2009 AD, at 10:00 am and 12.08.2011 AD at 10:00 am.

• Place of occurrence: At the homestead of the accused no.2.

136

B. JUDICIAL EVALUATION OF THE DEPOSITIONS OF JWS AND MATERIALS ON RECORD

The determining factors as per depositions recorded from JW1 ………………JW4 were as follows :


• Admittedly both the contending parties have prior legal rivalry emanated from

demand of dowry and matrimonial-dispute between the accused no.2’s daughter and

the complainant.

• Not all the witnesses rightly mentioned about the occurrence with necessary

corroboration to the complaint and the complainant’s deposition.

C. FINDINGS OF THE JUDICIAL INQUIRY

Upon considering the facts and circumstances of this complaint case followed by the perusal

of the complaint, depositions recorded and the papers appended to the case-record the

following points appear to me which paved the way to the findings of this Judicial Inquiry:

11. It is to be argued that Section 415 of the Penal Code which defines the offence of

‘Cheating ’ spelt out that there must be an initial intention of deception in any

given fact to attract this offence the punishment of which is enunciated in Sections

417. Thus, for bringing this case within the purview of this section the test is whether

there was a primary intention on the part of the accused persons to deceive the

complainant by the alleged overt act. Hence, after analyzing the oral evidence

recorded it appears to me that there was no such fraudulent intention on the part of

the accused persons. Consequently elements of the offence of ‘Cheating’ have not

been found in this case. So, arguably, elements of the offence u/s.420 was not found

in the present fact.

12. It appears to this Court that admittedly no entrustment of property has been made to

the accused persons , as such, the prime element of dishonest misappropriation of

entrustment is absent and as such no proceeding under Section 406 is maintainable

against the accused persons. Furthermore, no elements of the offence of ‘Criminal

breach of trust’ as created by Section 405 and Section 406 of the Penal Code was

found in course of this inquiry.

13. Moreover, it is not established by the complainant and other JWs that how

and in what manner other accused persons have aided the offences alleged

137

to have been committed by some of the accused persons. So in course of this

inquiry it was not primarily proved that any accused person has committed

the offence of abetment (vide S.109, Penal Code).

14. And arguably it is also apparent to this Court that admittedly no criminal act

or omission exists in the present fact that may amount to any of the elements

of the offence created by S. 506 of the Penal Code and as such no proceeding

under this provision is maintainable against the accused persons.

15. Therefore, upon the judicial scrutiny made above, this Court in its inquiring

capacity has explored no prima facie case in the present complaint.

16. That being so, in the opinion of this Court no sufficient reason for issuing

process against the persons complained of has been made out.

17. As a matter of fact, the facts disclosed in this case cannot possibly support a

prosecution under either section 406 or section 420 of the Penal Code. And

since no prima facie case was made out in course of this enquiry the offences

under SS. 406/420 of the Penal Code that were complained appeared to be

prima facie not credible.

18. It is sufficiently clear to this Court that no criminal act or omission exists in the

present fact that may amount to the offences created by SS. 406/420 of the

Penal Code and as such no prosecution under these provisions is maintainable

against the present set of accused persons.

D. RECOMMENDATION IN PURSUANT TO THE JE FINDINGS

This ENQUIRING COURT, on the basis of the findings of this Judicial Enquiry, is hereby

recommending for the NECESSARY LEGAL STEP in relation to this complaint upon the

JUDICIAL DISCRETION of the concerned COGNIZANCE TAKING COURT in accordance with

the LAW AND PROCEDURE for the ENDS OF JUSTICE.



138


Legal Literatures/ Law Books/ Treatise

� Kabir, Dr. Lutful: Lectures on the Pakistan Penal Code(With Leading Cases), Law House, 1st

edition, Dacca ( 1970).

� Ranchhoddas, Ratanlal and Thakore, Dhirajlal Keshavlal: The Indian Penal Code, Wadhwa &

Company, India, 28th edition, Reprint. 2005-06.

� Haque, Justice Mohammad Hamidul : Trial of Civil Suits and Criminal Cases, Judicial

Administration Training Institute(JATI), 1st edition, Dhaka(December, 2010).

� Islam, Md. Zahurul: The Penal Code, Bangladesh Law Book Company, 1st edition, Dhaka (2005).

� Huq, Zahirul: The Penal Code, Anupam Gyan Bhandar, Fifth edition, Dhaka ( July, 2005 ).

� The Penal Code: A publication by the Dhaka Law Reports(DLR) , 1st edition, Dhaka (2003).