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PETITIONER: ABDUL FAZAL SIDDIQUI

       Vs.

RESPONDENT: FATEHCHAND HIRAWAT AND ANOTHER

DATE OF JUDGMENT:       20/08/1996

BENCH: ANAND, A.S. (J) BENCH: ANAND, A.S. (J) THOMAS K.T. (J)

CITATION:  JT 1996 (8)   104        1996 SCALE  (6)224

ACT:

HEADNOTE:

JUDGMENT:                          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

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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  alongwith 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

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    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.