DEVENDER KUMAR SINGLAversusBALDEV KRISHAN SINGLA

--                        DEVENDER KUMAR SINGLA
                                         v.
                                                                                    A

                           BALDEV KRISHAN SINGLA

                              FEBRUARY 17, 2004

               [DORATSWAMY RAJU AND ARIJIT PASAYAT, JJ.]                            B


           Penal Code, 1860-Sections 420 and 34-0ffence of cheatmg-
     Conviction under-Justification of-Husband and wife purchasing shares from
     complainant-Husband issuing post-dated cheque and executing receipt that C
     shares were delivered to hi~heque signed by wife, filled in by complainant-
     Dishonour of cheque on stop payment by wife-Complaint-Acquittal by trial
     Court-However, High Court convicting husband and maintaining acquittal
     of wife-On appeal, held: On account of delivery of shares evidenced by
     receipt and pre-varicating stand with regard to stoppage ofpayment, order of
     High Court with regard to conviction of husband suffers from no infirmity- D
     However, sentence reduced to three months-As presence of wife a~ the time
     of transaction not established, acquittal of wife by High Court justified.

           According to the complainant (respondent in the first appeal),
     husband-accused (appellant in the first appeal) and his wife purchased
     shares from him. He was issued post dated cheque for the total sum after       E
     which complainant delivered the shares. Thereafter, the husband executed

-    a receipt. The cheque was signed by the wife but filled in by the complaint.
     Cheque w,as presented on the due date for encashment but was dishonored
     as payment was stopped by the drawer. Thereafter, complainant tried to
     recover money but the efforts failed. Hence he made a complaint. Husband       F
     and wife were charged under Sections 420 read with Section 34 IPC. Trial
     Court acquitted them since the complainant failed to establish the case.
     Complainant filed an appeal. High Court held that case under Section 420
     IPC was fully established against the husband and not wife, and thus,
     convicted the husband and maintained the acquittal of wife.
                                                                                    G
           Appellant in the first appeal viz., the husband contended that there
     is no.material whatsoever to show the delivery of the shares; that the
     receipt was in the nature of an advance receipt given in anticipation of
     futurt: delivery; that the complainant himself filled up the cheque, so far
                                         459
                                                                                    H
    460                   SUPREME COURT REPORTS                   (2004] 2 S.C.R.

A as the payee and amount are concerned there is no dispute; that if in reality
    the shares had been delivered, there is no reason as to why the accused
    would not fill in the cheque and give it blank to the complainant; that in
    the statement recorded under Section 313 Cr.P.C. the accused persons
    have in detail described the factual position and High Court has
B   erroneously ignored them; that if in reality the deal was struck on 7.8.1992
    there was no reason to stop the payment on 1.8.1992 before any deal had
    been struck; and that wheu the complainant was not aware of the details
    of the shares, the trial court's judgment should not have been interfered
    with by the High Court.

C         Respondent-complainant contended that the wife had stopped
    payment of the cheque and, therefore, being party to the transaction, she
    should also be convicted; that the High Court analysed the factual position;
    that in view of the receipt executed there was no scope for the accused to
    plead that there was no delivery; that even if it is conceded for the sake
    of argument that the complainant was not able to tell the full details
D   regarding the shares, that does not in any manner corrode the credibility
    of his case; and that the plea that an advance receipt was given was never
    taken during trial and in any event no suggestion in that regard was given
    to the complainant during cross-examination.

          Disposing of the appeals, the Court
E
          HELD: 1.1. In the instant case, High Court referred to the factual
    position that cheque was handed over to the complainant and in the receipt
    it was stated that shares have been received and drew a conclusion that
    the receipt clearly states that the shares had been transferred. The mere
    fact that the cheque was filled in by the complainant i:S not sufficient to
F
    take away the effect of the statement in the receipt. The plea that it was
    an advance receipt was not agitated before the Courts below. Significantly,
    there was no suggestion to the complainant that the shares had not been
    delivered.(466-C-D]

G         1.2. When there was definite assertion about delivery of shares
    evidenced by a receipt, the inability of the complainant to tell the number
    of shares is not sufficient to discard his case. It only establishes that the
    complainant did not remember the number of shares and the evidentiary
    value of the receipt is not in any manner disproved.

H         1.3. What appears to have weighed with the trial Court is that the
            DEVENDER KUMAR SINGLA v. BALDEV KRISHAN SINGLA               46 J

transaction allegedly took place on 27.7.1992. Significantly there is also A
no suggestion to the complainant during cross-examination by the accused
that the transaction was done on 27.7.1992 and not on 7.8.1992 as claimed
by the complainant. Merely because the accused stated that he had not
received the shares or that the transaction took place on 27.7.1992 in his
examination under Section 313 of Cr.P.C. that is really of no consequence. B
The statement under Section 313 is not evidence. It is only the accused's
stand or version by way of explanation, when incriminating materials
appearing against him are brought to his notice. Absence of any suggestion
during cross-examination cannot be made up by a statement under Section
313 Cr.P.C. At that stage, the prosecution does not get an opportunity to
question the accused about his stand in the statement under Section 3!3. C
                                                         (466-F-H; 467-A)

      1.4. Pre-varicating stands have been taken as to why stoppage of
payment was done. As rightly noticed by the High Court, if the stand of
the accused was that shares were to be handed over by 5.8.1992, there
was no necessity to direct stoppage of payment on 1.8.1992. Stand before         D
the trial court was that wife stopped payment when she came to know that
accused had used her signed blank cheque. But during the course of
arguments, husband submitted that she had no knowledge of any
transaction for purchasing shares, with no identification or particulars of
said shares. Therefore High Court's judgment convicting the husband-             E
accused suffers from no infirmity. However, considering the peculiar
circumstances of the case, custodial sentence of one year is reduc'!d to three
months. [467-B-D)

      2. Wife's presence at the time of the transaction has not been
established. Though she had signed the cheque, admittedly the same was           F
handed over to complainant only by the husband-accused. There was no
deception established so far as she is concerned. Therefore, High Court
rightly held that no case is established against the wife. [467-E-FJ

      Bashirbhai Mohamedbhai v. State of Bombay, AIR (1960) SC 979,
relied on.                                                                       G
      Shivanarayan Kabra v. State of Madras, AIR (1967) SC 986, referred
to.

     CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
1036 of 1997.                                                                    H
A
    462                    SUPREME COURT REPORTS                   [2004] 2 S.C.R.

         From the Judgment and Order dated 19.8.96 of the Punjab and Haryana
    High Court in Cr!. A.P.No. 618-DBA of 1995.
                                                                                     --
                                       WITH

          Cr!. A. No. 1050 of 1997.
B
         O.P. Sharma, R.C. Gubrele, Ms. Eliza Rumthao and Ms. Aruna Gupta
    for Ms. Hemantika Wahi for the Appearing parties.

          The Judgment of the Court was delivered by

C         ARIJIT PASAYAT, J. These two appeals are inter-linked being directed
    against the common judgment of a Division Bench of the Punjab and Haryana
    High Court whereby Devender Kumar Singla, appellant in Criminal Appeal
    No. 1036 of 1997 was found guilty of offence punishable under Section 420
    of the Indian Penal Code, 1860 (in short the 'IPC'), while Mala Singla, the
    respondent in Criminal Appeal No. 1050 of 1997 was acquitted. Dr. Baldev
D   Krishan Singla, the respondent in the first appeal and the appellant in the
    second appeal was the complainant on the basis of whose complaint case was
    registered and the trial was held.

          Complainant's case in a nutshell is as under:

E         On 7th August, 1992 the accused Devender Kumar Singla in the
    company of his wife the other accused Mala Singla, purchased 7000 Master
    plus shares for Rs. 1,69,000 from the complainant Baldev Krishan in the
    presence of Teja Singh, son of Saijan Singh. The complainant wanted that the
    payment thereof be made in cash, but accused Devender assured him that as
F   he was a reputed dealer in the sale and purchase of shares, and his business
    ran into lacs, the payment by cheque would be more in order. The complainant
    acting on his representation accepted a post dated cheque No.447131 for a
    sum of Rs. 1,69,000 drawn on New Bank of India, Moga, and issued by
    accused Mala Singla, and was payable on 8th August, 1992. The complainant
    also delivered 7000 shares and in token of having received the same, Devender
G   executed a receipt Ex.PW 3/B. When the cheque was presented for encashment
    on 8th August, 1992, it was dishonoured on the ground that the payment had
    been stopped by the drawer and this fact was conveyed to the complainant
    vide memo Exh. PW 3/C dated 8th August, 1992. As the subsequent efforts
    to recover the money from the accused proved futile, the complainant filed
H   the complaint in the Court of the Sub-Divisional Judicial Magistrate, Moga.
             DEVENDER KUMAR SINGLA v. BALDEV KRISHAN SINGLA [PASAYAT,J.]        463
      After recording the preliminary evidence, both the accused were summoned          A
      to face trial for offences punishable under Sections 420 and I 09 !PC. On a
      consideration of the pre-charge evidence of the complainant, Baldev Krishan
      (PW-3) as also that of Ram Ad)lar (PW-I) an employee of the Union Bank
      of India, Moga, Tarsem Lal (PW-2) an employee of the New Bank of India,
      Moga, Teja Singh (PW-4) and Naresh Kumar (PW-5) a clerk of Punjab                 B
---   National Bank, Moga, a prima facie case punishable under Section 420 read
      with Section 34 !PC was found to have been made out against both the
      accused and they were charged accordingly to which they pleaded not guilty
      and claimed trial.

             The Trial Court held that the complainant has not been able to establish   C
      several relevant factors. It was held that the transaction took place on 27th
      July, 1992 as claimed by the accused, and not on 7th August, 1992 as alleged
      by the complainant. There was no material to show that any shares were
      delivered to the accused. There was no record as regards the identity of the
      owner of the shares or as to whether they had in fact been transferred to the
      names of the accused. The existence of the alleged 7000 Master Plus shares        D
      was doubted. It was held that if the complainant was having 7000 Master
      Plus shares, he could have proved this fact by summoning the relevant records;
      _but such records were not produced. Each share certificate has a distinction
      mark, and if the complainant had purchased the shares he should have been
      aware of the person from whom he had purchased them and there was no              E
      material to show that the accused had transferred any Master Plus shares in
      their names. With these observations the ~ub-Divisional Judicial Magistrate,
      Moga directed acquittal of the accused persons.

             Aggrieved by the said order, the complainant preferred an appeal before


-     the Punjab and Haryana High Court. By the impugned judgment the High
      Court accepted the appeal so far as accused Devender Kumar Singla is
      concerned, but dismissed the ·same so far as Mala is concerned. It took note
      of the fact that there was no dispute that the cheque had been issued and a
                                                                                        F



      receipt was executed by the accused Devender Kumar Singla which clearly
      stated that the shares had been delivered to him. Merely because the
      complainant had filled the name of the beneficiary of the cheque, that did not    G
      dilute the very important factor that the accused Devender had clearly stated
      in the receipt that he had issued the cheque against payment of 7000 Master
      Plus shares and had received delivery of the shares. It was furthe~ noted that
      the accused Devender took the stand about the agreement to transfer the
      shares by 5th August, 1992. If that was so, the High Court observed, there        H
    464                    SUPREME COURT REPORTS                    [2004] 2 S.C.R.

A was no necessity for directing the bank to stop the payment on 1st August,
   1992. There was no reason whatsoever for the accused to apprehend any foul
  play at the hands of the complainant prior to 5th August, 1992. The stand
  taken by the accused Mala Singla was at a great variance with that of her
  husband Devender Kumar Singla. According to accused Mala she had gone
B out to her parental house leaving some blank cheques signed and when she
                                                                                        ••
                                                                                        ,.

  returned on 30th July, 1992 she found the cheque book missing and therefore
  directed the Bank to stop payment. This was at a complete variance with the
                                                                                       --
  stand of Devender who admitted the transaction between him and the
  complainant Accused Mala totally denied any such transaction. Th~ position
  regarding transactions in the bank account of accused Mala was also noticed
C by the High Court, which held that the accusations so far as the accused
  Devender were fully established, but the role of accused Mala was not fully
  established to bring home the accusations under Section 420 IPC. Therefore,
  the accused Devender was convicted under Section 420 IPC and sentenced
  to undergo imprisonment for one year and a fine of Rs. l 0,000. Acquittal of
D accused Mala was, as noted above, maintained.
           In support of the appeal filed by accused-appellant Devender, learned
    counsel submitted that the ingredients of Section 420 have not been established.
    There is no material whatsoever to show the delivery of the shares. Wrongful
    gain and wrongful loss which are required to be established to bring home           .
E   accusations under Section 420 IPC have not been established. The receipt            !
    was in the nature of an advance receipt and was given in anticipation of
    future delivery. The fact that the complainant himself filled up the cheques
    so far as the payee and amount are concerned, has not been disputed. If in
    reality the shares had been delivered, there is no reason as to why the accused
    would not fill in the complete cheque and give it blank to the complainant.
F   In the statement recorded under Section 313 of the Code of Criminal Procedure,
     1973 (for short the 'Cr.P.C.') the accused persons have in detail described the
    factual position and the High Court has erroneously ignored them. ·If in
                                                                                       --
    reality the deal was struck on 7.8.1992 there was no reason to stop the
    payment on 1.8.1992 before any deal had been struck. There was no material
G   to show the delivery of the shares and admittedly when the complainant was          t
    not aware of the details of the shares, the trial Court's judgment should not       1·-
    have been interfered with by the High court, which without properly                 ~
                                                                                        I-
    appreciating the factual position had convicted the accused Devender and
    sentenced him. The sentence itself is without any logical basis. So far as the
    appeal· filed by the complainant is concerned, learned counsel for the
H   complainant submitted that the accused Mala had stopped payment of the
           DEVENDER KUMAR SINGLA v. BALDEV KRISHAN SINGLA [PASAYAT,J]       465

    cheque and, therefore, being party to the transaction, she should also be     A
    convicted.

          So far as the appeal filed by the accused Devender is concerned, learned
    counsel submitted that the High Court has analysed the factual position. In
    view of the receipt executed, the contents of which are extracted in the High

-   Court's judgment, there was no scope for the accused to plead that there was B
    no delivery. Even if it is conceded for the sake of arguments that the
    complainant was not able to tell the full details regarding the shares, that does
    not in any manner corrode the credibility of his case. The plea that an advance
    receipt was given was never taken during trial and in any event no suggestion
    in that regard was given to the complainant who was examined as PW-3, C
    during cross examination.

           In order to appreciate the rival submissions, it would be necessa.y to
    consider on the background of the factual position as to whether offence
    punishable under Section 420 IPC is made out. Section 420 deals with certain
    specified classes of cheating. It deals with the cases whereby the deceived D
    person is dishonestly induced 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 se.aled and which is capable of being converted into a
    valuable security. Section 415 defines "cheating". The said provision requires,
    (i) deception of any person (ii) whereby fraudulently or dishonestly inducing
    that person to deliver any property to any person or to consent that any E
    person shall retain any property or (iii) intentionally inducing that person 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
    harin to that person in body, mind, reputation or property. Deception of any
    person is common to the second and third requirements of the provision. The F
    said requirements are alternative to each other and this is made significantly
    clear by use of disjunctive conjunction 'or'. The definition of the offence of
    cheating embraces some cases in which no transfer of property is occasioned
    by the deception and some in which no transfer occurs. Deception is the
    quintessence of the offence. The essential ingredients to attract Section 420
    are: (i) cheating; (ii) dishonest inducement to deliver property or to make, G
    alter or destroy any valuable security or anything which is sealed or signed
    or is capable of being converted into a valuable security and the (iii) mens
    rea of the accused at the time of making the inducement. The making of a
    false representation is one of the ingredients for the offence of cheating under
    Section 420. (See Bashirbhai Mohamedbhai v. State of Bombay, AIR (1960) H
    466                     SUPREME COURT REPORTS                    [2004] 2 S.C.R.

A SC 979.
          As was observed by this Court in Shivanarayan Kabra v. State of
    Madras, AIR (1967) SC 986 it is not necessary that a false pretence should
    be made in express words by the accused. It may be inferred from all the
    circumstances including the conduct of the accused in obtaining the property.
B   In the true nature of things it is not always possible to prove dishonest
    intention by any direct evidence. It can be proved by number of circumstances
    from which a reasonable inference can be drawn.

           On the proved facts it is seen that a cheque was handed over to the
C   complainant and in the receipt it was stated that the shares have been received.
    The High Court has referred to this factual position and drawn a conclusion
    that the receipt (Ex. PW3/B) which was admittedly executed by accused
    Devender clearly states that the shares had been transferred. The mere fact
    that the cheque was filled in by the complainant is not sufficient to take away
    the effect of the statement in the receipt. The plea that it was an advance
D   receipt does not appear to have been even agitated before the Courts below.

          Significantly, there was no suggestion to the complainant (PW-3) that
    the shares had not been delivered.

           Learned co1:1nsel for the accused appellant Devender strenuously urged
E   by putting questions about the number of shares etc., it was indirectly suggested
    that there was no delivery of shares. When there was definite assertion about
    delivery of shares evidenced by a receipt, the inability of the complainant to
                                                                                        --
    tell number of shares is not sufficient to discard his case. It only establishes
    that the complainant did not remember the number of shares. The evidentiary
    value of the receipt is not in any manner disproved by the inability of the
F   complainant to tell the numbers. Further, what appears to have weighed with
    the trial Court is that the transaction allegedly took place on 27.7.1992.
    Significantly there is also no suggestion to the complainant during cross-
    examination by the accused that the transaction was done on 27.7.1992 and
    not on 7.8.1992 as claimed by the complainant. Merely because the accused
G   stated that he had not received the shares or that the transaction took place
    on 27.7.1992 in his examination under Section 313 ofCr.P.C. that is really
    of no consequence. The statement under Section 313 is not evidence. It is
    only the accused's stand or version by way of explanation, when incriminating
    materials appearing against him are brought to his notice.

H         Absence of any suggestion during cross examination cannot be made
           DEVENDER KUMAR SIN.GLA v. BALDEV KRISHAN SINGLA [PASAYAT,J.]     467

    up by a statement under Section 313 Cr.P.C. At that stage, the prosecution      A
    does not get an opportunity to question the accused about his stand in the
    statement under Section 313.

          It is also seen that pre-varicating stands have been taken as to why
    stoppage of payment was done. As rightly noticed by the High Court, if the
    stand of the accused was that shares were to be handed over by 5.8.1992,        B
    there was no necessity to direct stoppage of payment on 1.8.1992. Stand
    before the trial Court was that accused Mala stopped payment when she came
    to know that accused No. l had used her signed blank cheque. But during the
    course of arguments, learned counsel for the appellant submitted that the
    accused Mala had no knowledge of any transaction for purchasing 7000            C
    Master Plus shares, with no identification or particulars of said shares.

          Above being the position, the High Court's judgment convicting the
    accused Devender suffers from no infirmity. However, custodial sentence
    imposed appears to be slightly on the higher side. Considering the peculiar
    circumstances of the case, we reduce the same to three months, instead of       D
    one year as directed by the High Court. Criminal appeal No. 1036/1997 is
    allowed only in respect of the sentence though challenge to the conviction
    has failed.

          Coming to the appeal filed by the complainant, against acquittal of


-   Mala it is seen that her presence at the time of the transaction has not been
    established. Though she had signed the cheque, admittedly the same was
    handed over to complainant only by accused Devender. Therefore, there was
    no deception established so far as she is concerned. The High Court has
                                                                                    E



    rightly held that the accusations have not been brought home so far as she
    is concerned. The appeal filed by the complainant i.e. Criminal Appeal          p·
-   No.1050/1997 is accordingly dismissed.

    N.J.                                                  Appeals disposed of.




-