LexVESA HOLDINGS P. LTD. & ANR. versus STATE OF KERALA & ORS.
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[2015] 4 S.C.R. 27 VESA HOLDINGS P. LTD. & ANR. v. STATE OF KERALA & ORS. (Criminal Appeal No. 2341 of 2011) MARCH 17, 2015 [V. GOPALA GOWDA AND C. NAGAPPAN, JJ.] Penal Code, 1860: s. 420 - Cheating - Proceedings under- Petition for quashing the proceedings - Dismissed by High Court - On appeal, held: Every breach of contract would not give rise to an offence of cheating - For the purpose A B c of constituting an offence of cheating, fraudulent or dishonest D intention should exist at the inception and if such intention is developed later, would not encompass within itself the offence of cheating-In the facts of the present case, offence uls. 420 not made out- Code of Criminal Procedure, 1973 -£482 E Code of Criminal Procedure, 1973 - s. 482 - Quashing of criminal proceedings- Held: If set of facts make out a civil wrong as also criminal offence, only because civil remedy is available, that itself cannot be a ground to quash F a criminal proceeding. Administration of Justice -Abuse of process of court - Held: Criminal proceedings not to be encouraged, if found to be ma la fide or otherwise an abuse of process of court. G Allowing the appeals, the Court HELD: 1. Every breach of contract would not give rise to an offence of cheating and only in those cases H 27 28 SUPREME COURT REPORTS [2015] 4 S.C.R. A breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. For the purpose of constituting an offence of cheating, the complainant is B required to show that the accused had fraudulent or dishonest intention at the time of making promise of representation. Even in a case where allegations are made in regard to failure on the part of the accused to C keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of IPC can be said to have been made out. [Para 8] [35-8-D] 0 2. A given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint E disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC. The complaint F does not disclose any criminal offence at all. [Para 9] [35-E-G] 3. Criminal proceedings should not be encouraged which it is found to be malafide or otherwise G an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice. In the facts of the present case, allowing the police investigation to continue would amount to an abuse of the process of court and the High H VESA HOLDINGS P. LTD. & ANR. v. STATE OF 29 KERALA & ORS. Court committed an error in refusing to exercise the A power under Section 482 CrPC to quash the proceedings. [Para 9] [35-G-H; 36-A]) Uma Shankar Gopalika Vs. State of Bihar and Anr. (2005) 10 SCC 336; All Cargo Movers (India) Private B Limited & Ors. Vs. Dhanesh Badarma/ Jain and Anr. (2007) SCC 776: 2007 (11) SCR 271; V. Y. Jose and Anr. Vs. State of Gujarat and Anr. (2009) 3 SCC 8: 2008 (17) SCR 588 - relied on. c Vjayander Kumar and Ors. Vs. State of Rajasthan and Anr. (2014) 3 SCC 389: 2014 (1) CR 1012- referred · to. Case Law Reference D (2005) 1 o sec 336 relied on Para 3 2007 (11) SCR 271 relied on Para 3 ' 2008 (17) SCR 588 relied on Para 3 E 2014 (1) CR 1012 referred to Para 4 CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 2341 of 2011. F From the Judgment and Order dated 28.01.2011 of the High Court of Kerala at Ernakulam in Criminal Miscellaneous Case No. 221 of 2011 WITH G Criminal Appeal Nos. 2342 - 2344 of 2011. A. Ramesh, R. Anand Padmanabhan, R. U. Deepan, Shashi Bhushan Kumar for the Appellants. H 30 SUPREME COURT REPORTS [2015] 4 S.C.R. A Devashish Bharuka, Ravi Bharuka, Jogy Scaria, B Reegan S. Bel for the Respondents. The Judgment of the Court was delivered by C. NAGAPPAN, J. 1. All these appeals are filed challenging the impugned common order dated 28.1.2011 passed by the High Cour
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