Abdul Fazal
Siddiqui Vs. Fatehchand Hirawat & Anr [1996] INSC 985 (20 August 1996)
Anand,
A.S. (J) Anand, A.S. (J) Thomas K.T. (J)
CITATION:
JT 1996 (8) 104 1996 SCALE (6)224
ACT:
HEAD NOTE:
O R D
E R
Respondent
No.1 filed a complaint in the Court of Additional Chief Presidency Magistrate, Calcutta, against the appellant (A.1) ,
Kochi Mia (A.2) and Fazlur Rahman (A.3) alleging offence under Section 120-B
read with Section 420 IPC and in the alternative under Section 420 IPC read
with Section 34 IPC.
According
to the complainant, Kochi Mia (A.2) and the appellant met him and requested him
to advance money against the stock-in-trade of business of the Calcutta Cafe of
which Fazlur Rahman (A.3) was represented to be the proprietor.
The
complainant wanted to meet Fazlur Rahman (A.3) himself before agreeing to
advance the loan. After a few days, Fazlur Rahman (A.3), Kochi Mia (A.2) and
the appellant went to the place of business of the complainant to meet him. A
friend of the complainant by name Mangtulal Bagaria was also present at that
time with the complainant. The three accused represented to the complainant
that Calcutta Cafe was free from all encumbrances and that the money could be
advanced against hypothecation. Both the complainant and his friend Mangtulal Bagaria
agreed to advance Rs.30,000/- to Fazlur Rahman. On the next date, a deed of
hypothecation was drafted and executed in the office of Mr. G. Bagaria (PW.4)
between the parties. In the deed of hypthecation, it was stated that the
business in question was free from all encumbrances and charges etc. The deed
of hypothecation was signed by Fazlur Rahman (A.3) On the basis of the specific
representation made orally and in the deed, the complainant and Mangtulal Bagaria
advanced a sum of Rs.30,000/- to Fazlur Rahman (A.3). The amount was advanced
against six hundies. Fazlur Rahman (A.3) also executed a general irrevocable
power of attorney in favour of the complainant and Mangtulal Bagaria authorising
them to tale charge of the management of the Calcutta Cafe in case of default
of payment as agreed to in the deed of hypothecation. Some payments were
subsequently made towards repayment of the loan by Fazlur Rahman (A.3) to the complianant
and Mangtulal Bagaria but after 28th November, 1966 admittedly no payments were made. On an enquiry made by the
complainant, it transpired that the representation made by Fazlur Rahman (A.3),
Kochi Mia (A.2) and the appellant was false because the property in question
was an encumbered property and in a suit filed in the Calcutta High Court,
Joint Receivers had been appointed regarding Calcutta Cafe. After recording the
preliminary evidence all the three accused were sent up for trial. It
transpired with no charge was framed against Kochi Mia (A.2) while Fazlur Rahman
(A.3) died during the pendency of the trial. The defence of the appellant was
that he was in no way connected with the alleged crime nor had he cheated the complianant
and his friend Mangtulal Bagaria and that he had not made any false
representation to the complainant to induce him to part with his money . He
asserted that he was not present at the time when the alleged representation
was made by A.3 to the complainant, at the time of the drawing up of the
hypothecation deed and that he had only subsequently identified the executant
at the request of the complainant and Kochi Mia (A.2).
In the
trial court the case, therefore, proceeded only against the appellant. The
learned trial Magistrate vide his order dated 24th April, 1972 convicted the
appellant for an offence under Section 420/34 IPC and sentenced him to undergo
rigorous imprisonment for six months and to pay a fine of Rs.500/- and in
default to undergo further rigorous imprisonment for two months. The appeal
filed by the appellant in the High Court failed on 30th August, 1979. By special leave the appellant is before us.
We
have examined the record and heard learned counsel for the parties. We find
that the complainant who appeared as PW.7 in the trial court in his
examination-in-chief stated that the amount was adcanced no believing in good
faith on the representation or accused Nos.2-3 that the property was not encumbered
. There is no mention of any representation having been made by the appellant
that the property was free from encumbrances. PW.8, Mangtulal Bagaria has also
net referred to any representation made by the appellant as regards the
property of Calcutta Cafe. PW.4 Mr. D. Bagaria, Solicitor, who drafted the
hypothecation deed stated that he had prepared the hypothecation deed on the
statement made to him by Fazlur Rahman (A.3) and that at that time besides Fazlur
Rahman (A.9), Mangtulal Bagarla and the complainant were present and that the
hypothecation deed was drafted under instructions of these three persons at his
office. He stated that it was Fazlur Rahman (A.3), who on being asked by him,
disclosed that Calcutta Cafe was not encumbered in any way. He also has not
implicated the appellant in any manner. This is all the crucial evidence in
this case. According to the complainant, however, the appellant had along with
A.2 and A.3 told the complainant that he may advance loan to A.3 against the
stock in trade.
Did
the appellant know that the stock in trade stood hypothecated? There is no such
averment much less any evidence on the record.
The
evidence on the record does not show that the appellant made any statement to
the complainant, which he knew to be a false statement. Section 415 IPC reads thus
:
"415.
Cheating - Whoever,
by deceiving any person, fraudulently or dishonestly- 5 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 as deceiption
within the meaning of this section." The expression "dishonestly"
has been defined in Section 24 IPC as "whoever does anything with the
intention of causing wrongful gain to one person or wrongful loss to another
person, is said to do that thing 'dishonestly".
"Fraudulently"
has been defined in Section 25 as 'a person is said to do a thing fraudulently
if he does that thing with intent to defraud but not otherwise'".
Although,
there is some evidence on the record to show that the amount of Rs.30, was
advanced by the complainant and Mangtulal Bagaria to Fazlur Rahman (A.3) on a
representation made by all the accused, including, the appellant, but taking
the complainant's case at its best, even if it be assumed that the appellant
had made a representation in the manner deposed to by the complianant, there is
nothing on the record to show that the appellant had any knowledge about the
Calcutta Cafe being an encumbered property or about the appointment of the
Joint Receivers by the Calcutta High Court in a suit in respect of that
property. There is no evidence to show that the appellant, knowingly made any
false representation much less dishonestly or fraudulently. The basic
ingredients of the offence of cheating are therefore, missing in the case. The
evidence on tile record does not connect the appellant with the crime alleged
against him at all. The courts below did not properly examine the legal
position as adverted to by us. A mere representation, which is neither claimed
or alleged to be dishonest or fraudulent would not attract the charge of
cheating only because the complainant parts with his money on the basis
thereof. In the present case the dishonest representation, both orally and in
the deed of hypothecation, was made by A.3, proprietor of the Calcutta Case.
The conviction and sentence against the appellant as recorded by the trial
court and confirmed by the High Court, under the circumstances is
unsustainable. We accordingly accept this appeal and set aside the conviction
and sentence of the appellant and acquit him. The appellant is on bail.
His
bail bonds shall stand discharged.
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