Pooja Hanmant Chougule And Anr vs. The State Of Maharashtra

Held

The Court held that the applicants, as office bearers controlling the society and signing crucial documents, could not escape liability. The Court found that the applicants had entered into agreements to raise money from the complainant for the stone crushing work, despite knowing that the government permission prohibited transferring the work without prior approval from the Central Government. This constituted a false representation to induce the complainant to part with money, which was subsequently misappropriated. The Court rejected the argument that it was purely a civil dispute, finding that the ingredients of cheating and misappropriation were made out. Considering the gravity of the offence and the need for custodial interrogation, anticipatory bail under Section 438 of Cr.P.C. was denied. The ad-interim protection previously granted was not continued.

Facts

The applicants, office bearers of a society, are seeking anticipatory bail in connection with a criminal case registered for offences including cheating and misappropriation. The complainant alleged that the applicants induced them to pay Rs. 2,12,00,000/- for a stone excavation work, promising to sub-let the contract. The applicants represented they lacked manpower and capital, and would use the complainant's funds to pay royalties. The complainant paid the amount, arranged loans, and started excavation. However, the applicants later stopped the work, claiming sub-letting was illegal, and failed to return the money, causing the complainant financial loss. The FIR was lodged after a Magistrate's order under Section 156(3) Cr.P.C. The applicants argued it was a civil dispute and they were not vicariously liable as office bearers. They also claimed the money was used for GST payments and that a penalty of Rs. 22 Crores imposed by the government indicated no misappropriation.

Key Issues

1. Whether the applicants, as office bearers of a society, can be held vicariously liable for the alleged offences of cheating and misappropriation, particularly when the transaction appears to be of a business nature (Section 406, 418, 420, 465, 467, 468, 471, 477-A of IPC)? 2. Whether the facts disclose a criminal offence of cheating and misappropriation, or if it is purely a civil dispute arising from a business transaction? Contentions: Petitioner/Applicants: Argued that as office bearers, they cannot have vicarious liability. They contended the entire transaction was a business one, and any dispute should be civil. They claimed the money was used for GST payments, and a large penalty imposed by the government indicated no misappropriation. They also highlighted that the FIR was registered only after a court order. Revenue/State: The intervenor (first informant) argued that bank transactions and signed receipts supported the complainant's case. They emphasized that the applicants were aware of the condition in the government permission prohibiting transfer of forest land without prior approval, yet they concealed this fact and took a huge amount from the complainant, subsequently stopping the work and not returning the money.