Supreme Court Quashes Cheating Charges Against Wife in Employment Fraud Case: Archana Rana vs. State of Uttar Pradesh (2021) INSC 167 (01 March 2021)

Case Background

The case began with a complaint filed by Respondent No. 2, alleging that the appellant’s husband had taken ₹5,00,000 from him with the promise of securing employment for his son. When the promised job did not materialize, and the complainant sought the return of his money, he alleged that the appellant assaulted him and his son and threatened them. The complainant stated that the appellant pushed them out of her house. This led to the registration of Case Crime No. 153/2016 at P.S. Kotwali, District Azamgarh, for offences under Sections 419, 420, 323, 504, and 506 of the Indian Penal Code (IPC). Following the investigation, a chargesheet was filed against the appellant and another individual.

Timeline

Course of Proceedings

The appellant filed a Criminal Miscellaneous Application No. 5213 of 2018 before the High Court of Judicature at Allahabad under Section 482 of the Code of Criminal Procedure (Cr.P.C.), seeking to quash the chargesheet and the criminal proceedings. The High Court dismissed the application, leading the appellant to appeal to the Supreme Court.

Legal Framework

The Supreme Court referred to the following sections of the Indian Penal Code (IPC):

• Section 415 IPC: Defines “cheating.” It states that “Whoever, by deceiving any person, fraudulently or dishonestly 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…is said to ‘cheat’.”
• Section 419 IPC: Deals with “punishment for cheating by personation.”
• Section 420 IPC: Deals with “cheating and dishonestly inducing delivery of property.” It states that “Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”
• Section 323 IPC: Deals with “punishment for voluntarily causing hurt.”
• Section 504 IPC: Deals with “intentional insult with intent to provoke breach of the peace.”
• Section 506 IPC: Deals with “punishment for criminal intimidation.”

The Court also considered the provisions of Section 482 of the Code of Criminal Procedure (Cr.P.C.), which deals with the inherent powers of the High Court to prevent abuse of the process of any court or to secure the ends of justice.

Arguments

Appellant’s Arguments:

• The appellant argued that a plain reading of the FIR and chargesheet does not establish a case against her, particularly under Sections 419 and 420 IPC.
• The appellant contended that the allegations against her do not satisfy the necessary ingredients for offences under Sections 419 and 420 IPC.
• The appellant relied on the judgments in Prof. R.K. Vijayasarathy v. Sudha Seetharam (2019) 16 SCC 739 and Dr. Lakshman v. State of Karnataka (2019) 9 SCC 677 to support her claim that the criminal proceedings should be quashed.

Respondent-State’s Arguments:

• The State conceded that a case under Sections 419 and 420 IPC might not be made out against the appellant.
• However, the State argued that a case was made out against the appellant for offences under Sections 323, 504, and 506 IPC.

Complainant’s Arguments:

• No one appeared on behalf of the complainant despite being served.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was:

1. Whether the allegations in the complaint and chargesheet constitute offences under Sections 419 and 420 of the Indian Penal Code against the appellant.

Treatment of the Issue by the Court

Authorities

Judgment

How each authority was viewed by the Court?

• The Court relied on Prof. R.K. Vijayasarathy v. Sudha Seetharam (2019) 16 SCC 739* to highlight that cheating is an essential ingredient for an offence under Section 420 IPC.
• The Court referred to Dr. Lakshman v. State of Karnataka (2019) 9 SCC 677* to understand the essential elements of the offence of cheating.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the absence of direct allegations against the appellant for the offences of cheating under Sections 419 and 420 of the Indian Penal Code. The Court emphasized that the core ingredients of cheating, particularly fraudulent or dishonest inducement, were not established against the appellant. The Court noted that the allegations of inducement and the receipt of money were specifically against the appellant’s husband. The Court also considered the High Court’s failure to exercise its inherent powers under Section 482 Cr.P.C. to quash the proceedings, which it deemed necessary in this case.

Logical Reasoning:

The Court found that the allegations against the appellant did not meet the legal threshold for offences under Sections 419 and 420 of the IPC. The court stated, “Having gone through the complaint/FIR and even the chargesheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Section 419 & 420 IPC.” The Court further noted, “There are no allegations at all that the appellant herein induced the complainant to get the job and the amount of Rs.5,00,000/- was given to the appellant herein.” The Court concluded that, “Therefore, even if all the allegations in the complaint taken at the face value are true, in our view, the basic essential ingredients of cheating are missing.”

Key Takeaways

• A person cannot be charged with cheating under Sections 419 and 420 IPC unless it is proven that they directly induced the complainant to part with their property or money.
• The essential ingredients of cheating, as defined under Section 415 IPC, must be present to sustain a charge under Section 420 IPC.
• High Courts have the power under Section 482 Cr.P.C. to quash criminal proceedings if the allegations do not disclose the commission of an offence.
• Even if some allegations are made against the accused, if the essential ingredients of a specific offence are not present, the court can quash the proceedings for that particular offence.

Directions

The Supreme Court directed that the criminal proceedings against the appellant for offences under Sections 323, 504, and 506 IPC should continue in the Court of the learned Chief Judicial Magistrate, Azamgarh, and be disposed of in accordance with the law.

Development of Law

The ratio decidendi of this case is that for an offence of cheating under Section 420 of the Indian Penal Code, the essential ingredients of cheating under Section 415 IPC must be satisfied. Specifically, there must be a direct inducement by the accused to the complainant to part with property or money. This judgment reinforces the principle that vicarious liability for cheating cannot be assumed without direct evidence of inducement by the accused.

Conclusion

The Supreme Court’s decision in Archana Rana vs. State of Uttar Pradesh provides clarity on the application of cheating charges under the Indian Penal Code. The Court emphasized that for a charge of cheating to stand, there must be evidence of direct inducement by the accused. The Court quashed the charges under Sections 419 and 420 IPC against the appellant, while allowing the proceedings to continue for the other offences of voluntarily causing hurt, intentional insult with intent to provoke breach of the peace, and criminal intimidation. This judgment underscores the importance of establishing the essential ingredients of an offence before proceeding with a criminal trial.