Penal Code, 1860: ss. 120A, 405, 415, 420, 499, 500 – In the instant case the first respondent was employed as a Consultant Neurosurgeon by BGS Apollo Hospital – Consultancy Agreement was entered into between the first respondent and the hospital containing his terms of engagement – One of the terms of the engagement was that either party may terminate the agreement, with or without cause, by giving a prior notice of thirty days – Differences arose between the first respondent and the management of the hospital – First respondent wrote a letter to the General Manager of the hospital alleging that patients referred to him were being diverted to other doctors of the hospital at the enquiry/reception counter – The services of the first respondent were terminated on 30 May 2014 for inconsistent and unsatisfactory behavior in terms of the Consultancy Agreement – Aggrieved first respondent furnished a representation on 31 May 2014 to the Managing Director of hospital highlighting gross irregularities in the billing of patients and he also alleged that the General Manager had been threatening and maligning him – Thereafter first respondent filed a complaint before Judicial Magistrate – In his complaint, he alleged that the General Manager misused his authority and terminated his services with an oblique and ulterior motive of defaming him – Magistrate took cognizance under ss.120A, 405, 415, 420, 499, and 500 of IPC – Sessions Judge set aside the order of the Magistrate on the ground that the complaint did not disclose the ingredients of the offences of defamation or cheating and that the Magistrate was not competent to take cognizance of the offence punishable under s.420 of the IPC – High Court held that no case was made out against the General Manager under ss.499 and 500 of the IPC however, there were material on record which prima facie disclosed the offences u/ss.405 and 420 of the IPC – Hence instant appeal – Held: The grievance of the first respondent arose from the termination of his services at the hospital and the allegations indicated that there was an improper billing in respect of the surgical services which were rendered by the complainant at the hospital which at the most indicated a breach of terms of the Consultancy Agreement by the General Manager, which was essentially in the nature of a civil dispute – There was no allegation that the complainant was as a consequence induced to deliver any property or to consent that any person shall retain any property or that he was deceived to do or omit to do anything which he would have not done or omitted to do if he was not so deceived – None of the ingredients of the offence of criminal breach of trust were demonstrated on the allegations in the complaint as they stand – First respondent alleged that the General Manager caused breach of trust by issuing grossly irregular bills, which adversely affected his professional fees but an alleged breach of the contractual terms does not ipso facto constitute the offence of the criminal breach of trust without there being a clear case of entrustment – No element of entrustment was prima facie established based on the facts and circumstances of the instant matter.
Penal Code, 1860: s.405 and s.415 – Essential ingredients – Discussed.
Allowing the appeal, the Court held
HELD: 1. The ingredients of the offence under Section 415 emerge from a textual reading. Firstly, to constitute cheating, a person must deceive another. Secondly, by doing so the former must induce the person so deceived to (i) deliver any property to any person; or (ii) to consent that any person shall retain any property; or (iii) intentionally induce 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 such an act or omission must cause or be likely to cause damage or harm to that person in body, mind, reputation or property. Section 420 deals with cheating and dishonestly inducing delivery of property. The ingredients of Sections 415 and 420 are not made out in the present case. The grievance of the first respondent arises from the termination of his services at the hospital. The allegations indicate that there was an improper billing in respect of the surgical services which were rendered by the complainant at the hospital. At the most, the allegations allude to a breach of terms of the Consultancy Agreement by the Appellant, which is essentially in the nature of a civil dispute.[Paras 14, 15 and 18][1103-D-F; 1105-E-F]
2. The allegations in the complaint are conspicuous by the absence of any reference to the practice of any deception or dishonest intention on behalf of the Appellant. Likewise, there is no allegation that the complainant was as a consequence induced to deliver any property or to consent that any person shall retain any property or that he was deceived to do or omit to do anything which he would have not done or omitted to do if he was not so deceived. The conspicuous aspect of the complaint which needs to be emphasized is that the ingredients of the offence of cheating are absent in the averments as they stand. [Para 19][1105-F-H]
3. Section 405 of the IPC deals with criminal breach of trust. The offence of criminal breach of trust contains two ingredients:(i) entrusting any person with property, or with any dominion over property; and (ii) the person entrusted dishonestly misappropriates or converts to his own use that property to the detriment of the person who entrusted it. None of the ingredients of the offence of criminal breach of trust have been demonstrated on the allegations in the complaint as they stand. The first respondent alleges that the Appellant caused breach of trust by issuing grossly irregular bills, which adversely affected his professional fees. However, an alleged breach of the contractual terms does not ipso facto constitute the offence of the criminal breach of trust without there being a clear case of entrustment. No element of entrustment has been prima facie established based on the facts and circumstances of the present matter. Therefore, the ingredients of the offence of criminal breach of trust are ex facie not made out on the basis of the complaint as it stands. There is a patent error on the part of the High Court in setting aside the judgment of the Additional Sessions Judge and by holding that cognizance was correctly taken of the offence punishable under Sections 405, 415, and 420 of the IPC. [Paras 20, 23, 24][1106-A-D; 1107-B-D]
Hridaya Ranjan Prasad Verma v. State of Bihar (2000)
4 SCC 168 : [2000] 2 SCR 859; Dalip Kaur v. Jagnar Singh (2009) 14 SCC 696 : [2009] 10 SCR 264; Anwar Chand Sab Nanadikar v. State of Karnataka (2003) 10 SCC 521; Kumar Ghai v. State of West Bengal (2022)
7 SCC 124 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.