Court sets aside order in civil dispute, no fraudulent intent found in breach of contract case

The court allowed the petition, setting aside and quashing the impugned order dated 29.2.2012 and Complaint Case No. 268C/11 pending in the court of SDJM(S), Bongaigaon. The court held that the dispute was civil in nature, arising from a breach of contract, and did not constitute an offence under Section 420 IPC due to the lack of dishonest or fraudulent intention at the time of the loan transaction.

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Issues Involved:
1. Quashing of Complaint Case No. 268C/11.
2. Validity of the order dated 29.2.2012 taking cognizance of the offence under Section 420 IPC.
3. Determination of whether the dispute is of civil or criminal nature.
4. Examination of the presence of dishonest or fraudulent intention at the time of taking the loan.

Detailed Analysis:

1. Quashing of Complaint Case No. 268C/11:
The petitioner filed an application under Section 482 of the Code of Criminal Procedure, 1973, and/or Article 227 of the Constitution of India, seeking to quash Complaint Case No. 268C/11 pending in the Court of Sub-Divisional Judicial Magistrate (S), Bongaigaon. The petitioner argued that the complaint did not disclose any dishonest or fraudulent intention at the time of taking the loan, and hence, the dispute was purely civil. The court noted that the complaint and the initial deposition did not contain any allegations of fraudulent or dishonest intention at the inception of the transaction, leading to the conclusion that the dispute was civil in nature.

2. Validity of the Order Dated 29.2.2012:
The order dated 29.2.2012, passed by the learned SDJM(S), Bongaigaon, took cognizance of the offence under Section 420 IPC and issued summons to the petitioner. The petitioner contended that the mere dishonor of the cheque due to insufficient funds did not satisfy the ingredients of Section 420 IPC. The court examined the complaint and the initial deposition, finding no mention of a fraudulent or dishonest intention at the time of the loan transaction. Consequently, the court held that the order taking cognizance of the offence under Section 420 IPC was not sustainable.

3. Determination of Whether the Dispute is of Civil or Criminal Nature:
The petitioner argued that the dispute was purely civil, arising from a breach of contract, and could not be converted into a criminal offence. The court reviewed the complaint and noted that the complainant had advanced the loan due to a long-standing friendly relationship and that the petitioner had issued a cheque as a token of assurance. Even after the cheque was dishonored, the complainant agreed to accept repayment in monthly installments. The court concluded that the dispute was civil in nature, as there was no indication of fraudulent or dishonest intention at the inception of the transaction.

4. Examination of the Presence of Dishonest or Fraudulent Intention at the Time of Taking the Loan:
The court emphasized that an offence of cheating under Section 420 IPC requires a fraudulent or dishonest intention at the time of making the promise or representation. The complaint and the initial deposition did not allege any such intention at the time the loan was advanced. The court cited several precedents, including Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors., Joseph Salvaraja v. State of Gujarat & Ors., and Manoranjan Halder v. M/s. Machfab Engineering Industries, to support the principle that the absence of dishonest intention at the initial stage negates the offence of cheating. The court concluded that the subsequent refusal to repay the loan did not relate back to the time of the initial transaction, and thus, no offence under Section 420 IPC was made out.

Conclusion:
The court allowed the petition, setting aside and quashing the impugned order dated 29.2.2012 and Complaint Case No. 268C/11 pending in the court of SDJM(S), Bongaigaon. The court held that the dispute was civil in nature, arising from a breach of contract, and did not constitute an offence under Section 420 IPC due to the lack of dishonest or fraudulent intention at the time of the loan transaction.

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