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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
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Acts
  • Section 482 of the Page: 428Code of Criminal Procedure
  • Sections -406, 415, 420 and 506 of the Indian Penal Code
  • Section 406 and 420, Indian Penal Code,
  • Section 420, Indian Penal Code.4.
  • Section 420, Indian Penal Code.6.
  • section 406, Indian Penal Code,
  • section 420, Indian Penal Code.
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Section 482 of the Page: 428Code of Criminal Procedure
  • Sections -406, 415, 420 and 506 of the Indian Penal Code
  • Section 406 and 420, Indian Penal Code,
  • Section 420, Indian Penal Code.4.
  • Section 420, Indian Penal Code.6.
  • section 406, Indian Penal Code,
  • section 420, Indian Penal Code.
Smart Summary

Factual and Procedural Background

Two connected petitions under Section 482 of the Code of Criminal Procedure (Crl. Misc. No. 4315-M of 1985 and Crl. Misc. No. 6411-M of 1985) were filed seeking quashing of criminal proceedings. The first petition sought to quash a complaint dated April 20, 1985, filed by Chaman Lal under Sections 406, 415, 420 and 506 of the Indian Penal Code against the petitioner in the Court of Sub-Divisional Judicial Magistrate, Panipat. The second petition sought to set aside a First Information Report No. 138 dated January 27, 1985, recorded at the Police Station on the same facts and under Sections 406 and 420 of the Indian Penal Code.

The allegations involved the respondent, Chaman Lal, who manufactured carpet woollen yarn and supplied it to the petitioner on multiple occasions between December 27, 1980 and May 23, 1981. After deliveries, the respondent demanded payment, to which the petitioner responded by issuing eight cheques, all of which were dishonoured upon presentation, leading to allegations of fraud and breach of trust.

Legal Issues Presented

  1. Whether the dishonouring of cheques issued to discharge a pre-existing liability constitutes a criminal offence under Sections 406 or 420 of the Indian Penal Code.
  2. Whether the complaint and First Information Report based on these allegations should be quashed under Section 482 of the Code of Criminal Procedure.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Iqbal Singh Randhawa v. Doctor Satpaul Goyal, 1977 C.L.R (Pb. & Har.) 134 Distinction between offences under Section 406 (criminal breach of trust) and Section 420 (cheating) IPC; these offences are mutually exclusive. The Court relied on this precedent to establish that an accused cannot be tried simultaneously for both offences as they are antithetical in nature.
Chhote Lal Aggarwal v. The State of Punjab, 1987 (2) Recent CR 263; 1987 (1) C.L.R 480 Distinction between issuance of cheque to discharge an existing liability and issuance of cheque against delivery of goods with intent to cheat. The Court applied this principle to conclude that dishonouring of cheques issued for an existing liability amounts only to breach of promise, not a criminal offence.

Court's Reasoning and Analysis

The Court began by referencing established legal principles distinguishing offences under Sections 406 and 420 IPC, noting they are mutually exclusive: criminal breach of trust involves voluntary custody of property, whereas cheating involves deceit inducing parting with property. The Court then drew on prior case law to differentiate between cheques issued to discharge an existing debt and those issued as a fraudulent assurance at the time of delivery of goods.

In the present facts, the respondent supplied goods first and only then demanded payment, with the petitioner issuing cheques to discharge this pre-existing liability. The dishonouring of these cheques was thus characterized as breach of promise, a civil wrong, rather than a criminal offence under Sections 406 or 420 IPC. On this legal basis, the Court found no grounds to proceed with the criminal complaint or FIR.

Holding and Implications

The Court's final decision was to quash the impugned complaint, the First Information Report, and all proceedings arising therefrom in the Court of Sub-Divisional Judicial Magistrate, Panipat.

This decision directly terminates the criminal proceedings against the petitioner based on the dishonoured cheques in question. The Court did not set any new precedent but reaffirmed existing distinctions between civil liability for dishonoured cheques and criminal offences under the Indian Penal Code.

    Jalpa Parshad Aggarwal v. State Of Haryana And Anr.

    Pritpal Singh, J.:— Two connected petitions under Section 482 of the Page: 428Code of Criminal Procedure (Crl. Misc. No. 4315-M of 1985 and Crl. Misc. No. 6411-M of 1985) are being disposed of by this order. In the first petition a complaint dated April 20, 1985 (Annexure P. 3) filed by Chaman Lal respondent under Sections -406, 415, 420 and 506 of the Indian Penal Code against the petitioner in the Court of Sub-Divisional Judicial Magistrate, Panipat, is sought to be quashed. In the second petition a First Information Report No. 138 dated January 27, 1985. recorded at the Police Station at the instance of the same respondent under Section 406 and 420, Indian Penal Code, against the petitioner on the same facts is also sought to be set aside.

    2. In the impugned complaint and the First Information Report it is alleged by the respondent Chaman Lal that he is manufacturing carpet woollen yarn in the Industrial Area, Panipat. He supplied the yarn to the petitioner on various occasions between 27th of December 1980 and 23rd May, 1981. After the delivery of these goods on seven occasions the respondent demanded payment of the price thereof. The petitioner thereupon issued eight cheques of different dates in his favour. These cheques, on presentation to the Bank, were dishonoured. On these allegations it has been alleged that the petitioner has defrauded the respondent and has committed breach of trust.

    3. At the very outset it may be mentioned that this Court held in Iqbal Singh Randhawa v. Doctor Satpaul Goyal, 1977 C.L.R (Pb. & Har.) 134, that an offence under Section 406, Indian Penal Code, is, an antithesis of offence under section 420, Indian Penal Code. In a case of criminal misappropriation the property is voluntarily kept in the custody of an accused wheseas in a case of cheating, the accused, by adopting deceitful means, induces the complainant to part with the property. Thus, an accused cannot be tried for these two offences simultaneously. Either he his committed an offence under Section 406, Indian Penal Code or under section 420, Indian Penal Code.

    4. I held in my earlier judgment in Chhote Lal Aggarwal v. The State of Punjab, 1987 (2) Recent CR 263 : 1987 (1) C.L.R 480, that unless the delivery of the goods bad been made against a cheque, then due to the dishonouring of the same, which was issued for an already existing liability, no criminal offence is made out. A distinction has to be drawn between a case where a cheque is issued in order to discharge an existing liability and a case where it is issued against delivery of goods with an assurance that it will be encashed when presented to the Bank. In the first case it would amount only to a breach of promise if the cheque is not encashed but in the second case it may be prima facie evidence of an intention to cheat.

    5. In the present case the respondent Chaman Lal has alleged that be had supplied goods to the petitioner on various occasions and only thereafter the price thereof was demanded by him and to discharge this existing liability the petitioner had issued a number of cheques in respondent's favour which were dishonoured on presentation to the Back. Clearly, therefore, the cheques were not issued against delivery of goods but were drawn in order to discharge a preexisting liability. I am, therefore, of view that the dishonouring of the cheques amounted to breach of promise which is a civil liability and no criminal offence is made out either under Section 406 or under section 420, Indian Penal Code.

    6. In this view of the matter the impugned complaint as well as the First Information Report and the proceedings taken in pursuance thereof in the Court of Sub-Divisional Judicial Magistrate, Panipat are hereby quashed.

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    Comments

    Jalpa Parshad Aggarwal v. State Of Haryana And Anr.
    (Jul 24, 1987)