Karan Deepak Jadhav vs. State Of Maharashtra And

Held

The Court held that the facts presented prima facie indicated the ingredients of the alleged offences were made out. The Court referred to Section 415 of the IPC, defining cheating, and emphasized that the intention to deceive must be present from the beginning. While acknowledging the fine distinction between a breach of contract and cheating, the Court noted that the applicant's explanation for depositing funds into his company's account did not address the failure to pay the complainant his share of profits. The Court cited the Supreme Court's observation in Hridaya Ranjan Prasad Verma vs. State of Bihar that mere failure to keep up a promise does not automatically imply a fraudulent intention at the outset, but subsequent conduct can be indicative. The Court also referenced Digvijaysingh Himmatsingh Jadeja vs State of Gujarat, stating that a civil wrong can also be a criminal offence. In this case, the complainant alleged non-payment of any amount till date, suggesting a mala fide intention from the inception of the joint venture. The Court found that the FIR disclosed the commission of a cognizable offence and, under its writ jurisdiction, would not conduct a mini-trial to determine the veracity of documents. Therefore, the application was dismissed.

Facts

The applicant, Karan Deepak Jadhav, sought to quash an FIR registered against him for offences under Sections 406, 409, and 420 of the IPC. The FIR stemmed from a joint venture for constructing an airport at Panvel. The complainant alleged that the applicant, a contractor, was introduced to collaborate on the project. A Joint Venture Agreement was executed, outlining responsibilities for financing, paperwork, and providing vehicles. The JV was registered as 'M/s. KJRVP'. Since KJRVP lacked a KYC and GST number, a bank account could not be opened. Money received for the project was deposited into the applicant's 'KJ Group of Companies' account. The complainant alleged the applicant cheated him by not sharing the profits and also failed to pay for the rental of his machinery. The applicant contended the dispute was civil, arising from a partnership disagreement, and that the JV's lack of a GST number necessitated using his company's account. He also pointed to an arbitration clause in the agreement.

Key Issues

1. Whether the facts alleged in the FIR, prima facie, constitute the offence of cheating under Section 415 of the Indian Penal Code, 1860, despite the existence of a joint venture agreement with an arbitration clause? Arguments: Petitioner/Applicant: The dispute is purely civil in nature, arising from a breach of contract and partnership disagreements. The Joint Venture Agreement contains an arbitration clause, indicating that disputes should be resolved through arbitration, not criminal prosecution. The use of the applicant's company account was necessitated by the JV's lack of a GST number and KYC, which prevented opening a separate bank account. The FIR does not disclose any offence punishable under the alleged sections. Revenue/State (represented by APP and Complainant): The applicant's conduct, particularly depositing all project funds into his own company's account and failing to pay the complainant his share of profits and machinery rent, demonstrates a fraudulent and dishonest intention from the inception of the joint venture. This is not merely a breach of contract but constitutes cheating. The Supreme Court has held that a civil wrong can also constitute a criminal offence if the ingredients of the criminal offence are met. The FIR clearly discloses the commission of a cognizable offence.