{"file_name": "2024_10_2265_2277_EN.pdf", "text": "[2024] 10 S.C.R. 2265 : 2024 INSC 1060\n\nV.D. Raveesha \nv. \nThe State of Karnataka\n\n(Special Leave Petition (Criminal) No. 980 of 2024)\n\n22 October 2024\n\n[Sudhanshu Dhulia and Ahsanuddin Amanullah,* JJ.]\n\nIssue for Consideration\n\nWhether  the  petitioner  is  guilty  of  committing  offences  u/ss.406, \n420,  468,  465  and  471  IPC,  and  if  so,  whether  the  sentences \nimposed on him by the Trial Court and confirmed by the Appellate \nCourt and High Court call for interference.\n\nHeadnotes†\n\nPenal Code, 1860 – ss.406, 420, 468, 465, 471 – Petitioner failed \nto repay the loan obtained to purchase a vehicle – Allegation \nthat petitioner forged documents and sold the vehicle to one  \nS – FIR registered – Trial Court found petitioner guilty of offences \nu/ss.406, 468, 465, 420, and 471 of IPC – Criminal Appeal was \ndismissed by the Appellate Court – Criminal Revision filed by \nthe petitioner was also dismissed – Correctness:\n\nHeld: The accused has not denied availment of the loan from the \nCompany and the subsequent sale of the vehicle made in favour \nof  S  –  The  petitioner  has  taken  the  stand  that  the  documents \nare  genuine  and  not  forged  and/or  fabricated,  when  the  entire \nevidence, both oral as well as documentary, clearly reveal to the \ncontrary  – There  is  no  record,  whatsoever,  forthcoming  to  show \nthat the accused had repaid the loan – Had the petitioner actually \npaid back the loan, it could have been demonstrated by bringing \nbefore the Courts documents to indicate that money was transferred \nfrom his account/source to the financier-Company – This has not \nbeen done – For the purposes of establishing the petitioner’s guilt, \nthere was sufficient and reliable material, which rightly the Courts \nbelow  have  believed  and  relied  upon  – Thus,  no  infirmity  in  the \nsame having been found, the conviction needs no interference – \nIn the interest of justice, sentenced reduced to one year and six \nmonths’ simple imprisonment. [Paras 12, 18, 19]\n\nPenal  Code,  1860  –  s.406  and  s.420  –  Difference  between \ncriminal breach of trust and cheating – Discussed.\n\n* Author\n\n\f2266 \n\n[2024] 10 S.C.R.\n\nPenal Code, 1860 – s.406 and s.420 – Whether the petitioner, \nin the instant case, can be convicted both u/ss.406 and s.420 \nof IPC:\n\nHeld: On an overall conspectus of the factual aspects juxtaposed \nwith the evidence on record, as regards fulfilment of the ingredients \nof ss.406 and 420 of the IPC, at first sight, it may appear that the \npetitioner cannot be convicted both u/ss.406 and 420 of the IPC, \nbut, in the present case, on a proper consideration of the issue in its \nentirety, there is a fine distinction inasmuch as, there are two different \npersons against whom the petitioner has committed the respective \noffences under the Sections supra – Evidently the petitioner is guilty \nof offence committed against the Company punishable u/s.406 of the \nIPC and also, of offence committed against M (PW4 and husband \nof purchaser S) punishable u/s.420 of the IPC. [Para 21]\n\nCase Law Cited\n\nDelhi Race Club (1940) Limited v. State of Uttar Pradesh [2024] \n8 SCR 670 : (2024) 10 SCC 690 – relied on.\n\nPenal Code, 1860.\n\nList of Acts\n\nList of Keywords\n\nCriminal  breach  of  trust;  Cheating;  Vehicle;  Loan;  Default  in \nrepayment of loan; Forgery; Fabrication of documents.\n\nCase Arising From\n\nCRIMINAL APPELLATE  JURISDICTION:  Special  Leave  Petition \n(Criminal) No. 980 of 2024\n\nFrom the Judgment and Order dated 11.10.2023 of the High Court \nof Karnataka at Bengaluru in CRLRP No. 653 of 2020\n\nAppearances for Parties\n\nAdvs. for the Petitioner:\nRahul Kaushik, Sr. Adv., Anil C Nishani, Keshav Murthy, Jayram, \nVishwesh R Murnal, M/s. Krishna & Nishani Law Chambers.\n\nAdvs. for the Respondent:\nV. N. Raghupathy, Raghavendra M. Kulkarni.\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2267\n\nJudgment / Order of the S.upreme Court\n\nJudgment\n\nAhsanuddin Amanullah, J.\n\nThe present petition impugns the Final Judgment and Order dated \n11.10.2023 (hereinafter referred to as the ‘Impugned Order’) passed \nby  the  High  Court  of  Karnataka  at  Bengaluru  (hereinafter  referred \nto  as  the  ‘High  Court’)  in  Criminal  Revision  Petition  No.653/2020, \nwhereby the High Court confirmed the Judgment and Order dated \n25.08.2020  passed  in  Criminal Appeal  No.29/2018  by  the  learned \nVI Additional  District  and  Sessions  Judge,  Tumakuru  (hereinafter \nreferred to as the ‘Appellate Court’) which had affirmed the conviction \nrecorded  and  sentence  awarded  to  the  petitioner,  by  the  learned \nAdditional Senior Civil Judge and Chief Judicial Magistrate, Tumakuru \n(hereinafter referred to as the ‘Trial Court’) vide Judgment and Order \ndated 26.04.2018 in C.C.No.1218/2012.\n\nFACTUAL OVERVIEW:\n\n2.  The  petitioner  (hereinafter  also  referred  to  as  the  ‘accused’)  had \npurchased  a  vehicle  bearing  Registration  No.KA-41-2298  by \nobtaining financial assistance of Rs.3,00,000/- (Rupees Three Lakhs) \nfrom M/s Shriram Transport Finance Company Limited (hereinafter \nreferred to as the ‘Company’). A Loan-cum-Hypothecation Agreement \n(hereinafter referred to as the ‘Agreement’) was entered into between \nthe  accused  and  the  Company  whereby  the  above-mentioned \nvehicle was hypothecated in favour of the Company and the same \nwas duly notified/marked in the Registration Certificate of the said \nvehicle. Though the accused had paid one or two instalments, but \nthereafter, he defaulted and despite several requests, the accused \ndid not make further payments. Accordingly, since as per the terms \nof  the Agreement,  the  vehicle  could  be  seized  by  the  Company, \non  18.02.2011,  the  concerned  Branch  Manager  of  the  Company \nseized  the  vehicle  and  took  it  to  the  police  station. At  that  time, \nit  was  revealed  that  the  petitioner,  without  repaying  the  loan  of \nRs.2,95,000/- (Rupees Two Lakhs Ninety-Five Thousand) had forged \nand created (i) receipt no. AD 0873936 for having repaid the loan \n\nV.D. Raveesha v. The State of Karnataka\f2268 \n\n[2024] 10 S.C.R.\n\namount; (ii) No-Objection Certificate, and; (iii) Form No.35 purported \nto  have  been  issued  by  the  Company,  by  forging  the  signatures \nof the authorized signatories and had also sold the vehicle to one \nSavithramma.  In  short,  it  was  alleged  that  the  petitioner,  without \ndischarging the entire loan liability due towards the Company, sold \noff the vehicle by producing forged documents before the Regional \nTransport Office (hereinafter referred to as ‘RTO’) and getting the \nhypothecation cleared.\n\n3.  On the basis of these allegations, the Company’s Branch Manager \nlodged  complaint  leading  to  lodging  of  First  Information  Report \nbearing Crime No.34/2011 on 18.02.2011 under Sections 4061, 4202 \nand 4683 read with 344 of the Indian Penal Code, 1860 (hereinafter \nreferred  to  as  the  ‘IPC’).  On  16.11.2011,  Chargesheet  was  filed \nagainst the petitioner under Sections 406, 468, 420, 465 and 471 \nof  IPC  in  the  case  registered  as  C.C.  No.1218/2012  before  the \nTrial Court.\n\n4.  Before the Trial Court, the prosecution examined PW1 to PW13 and \ngot marked Ex. P1 to Ex. P32 and got exhibited one Compact Disc \nas  M.O.1.  The  petitioner  chose  not  to  lead  any  defence  evidence \non  his  behalf,  except  producing  a  document  marked  as  Ex.  D1. \nOn a consideration of the materials before it, the Trial Court found \nthe petitioner guilty of offences under Sections 406, 468, 465, 420 \nand  471  of  the  IPC  and  sentenced  him  to  rigorous  imprisonment \n(hereinafter abbreviated to ‘R.I.’), simple imprisonment (hereinafter \nabbreviated to ‘S.I.’) and fine(s), as under:\n\n1 \n\n2 \n\n3 \n\n4 \n\n‘406.  Punishment  for  criminal  breach  of  trust.—Whoever  commits  criminal  breach  of  trust  shall  be \npunished with imprisonment of either description for a term which may extend to three years, or with fine, \nor with both.’\n\n‘420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly \ninduces the person deceived to deliver any property to any person, or to make, alter or destroy the whole \nor any part of a valuable security, or anything which is signed or sealed, and which is capable of being \nconverted into a valuable security, shall be punished with imprisonment of either description for a term \nwhich may extend to seven years, and shall also be liable to fine.’\n\n‘468.  Forgery  for  purpose  of  cheating.—Whoever  commits  forgery,  intending  that  the  document  or \nelectronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment \nof either description for a term which may extend to seven years, and shall also be liable to fine.’\n\n‘34. Acts done by several persons in furtherance of common intention.—When a criminal act is done by \nseveral persons, in furtherance of the common intention of all, each of such persons is liable for that act \nin the same manner as if it were done by him alone.’\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2269\n\nIPC Section Conviction and Sentence\n\n406\n\n468\n\n465\n\n420\n\n471\n\nFine of Rs.5,000/-.\nIn  default  of  payment  of  fine,  to  undergo  three \nmonths’ S.I.\n\nTwo years’ R.I. along with fine of Rs.3,000/-.\nIn  default  of  payment  of  fine,  to  undergo  further \nthree months’ S.I.\n\nFine of Rs. 5,000/-.\nIn  default  of  payment  of  fine,  to  undergo  three \nmonths’ S.I.\n\nTwo years’ R.I. along with fine of Rs.3,000/-.\nIn  default  of  payment  of  fine,  to  undergo  further \nthree months’ S.I.\n\nFine of Rs.5,000/-.\nIn  default  of  payment  of  fine,  to  undergo  three \nmonths’ S.I.\n\n5.  Aggrieved  by  the  conviction  and  sentence  awarded  supra,  the \npetitioner  filed  Criminal  Appeal  No.29/2018,  which  came  to  be \ndismissed  by  the Appellate  Court.  Thereafter,  the  petitioner  filed \nCriminal Revision Petition No.653/2020 before the High Court which \nhas also been dismissed vide the Impugned Order and the conviction \nand sentence, imposed and affirmed by the Courts below, has been \nconfirmed.\n\nSUBMISSIONS BY THE PETITIONER:\n\n6.  At the outset, learned senior counsel submitted that the High Court \nas well as the Appellate Court and the Trial Court committed error \nin  convicting  the  petitioner  without  considering  his  case.  It  was \nargued  that the Courts below failed to  appreciate  the fact that the \npetitioner had repaid the loan amount and received the receipt (Ex. \nP9),  No-Objection  Certificate  (Ex.  P8)  and  Form  No.35  (Ex.  P10) \nfrom the Company, after clearing the loan. It was pointed out that the \nCompany failed to produce any document/ledger/booklet to show that \nthe loan was not repaid by the accused. Even the allegedly-forged \nForm No.35 was never produced before the Courts. \n\nV.D. Raveesha v. The State of Karnataka\f2270 \n\n[2024] 10 S.C.R.\n\n7. \n\n8. \n\n9. \n\nIt was argued that the prosecution failed to produce any evidence/\nmaterial to show how the disputed documents were fabricated and \nby  using  which  computer/printer.  There  is  also  no  material  placed \non record to connect the accused with the forged signatures. It was \nsubmitted that in the absence of such evidence, the petitioner cannot \nbe convicted for the alleged offences in question.\n\nIt was submitted that Exs. P11 and P12 are said to be the formats \nof  the  receipt  and  No-Objection  Certificate,  which  the  Company \nissues  to  its  customers. A  customer  entitled  to  receive  Exs.  P11 \nand P12 was not examined  before the Trial Court. When  the loan \npertaining  to  the  said  customer  is  cleared  and  Exs.  P11  and  P12 \nwere issued, there was no reason for the Company to retain those \ndocuments  with  it.  Therefore,  no  importance  could  be  attached  to \nthe said documents, and it was submitted that the said two exhibits \nwere not produced from proper custody. \n\nIt was further submitted that all the witnesses were employees of the \nCompany and hence no reliance could be placed on their depositions. \nIt was pointed out that PW4 was the only independent witness and \nPW13 did not support the case of the prosecution. It was put forth \nthat the prosecution failed to prove its case beyond reasonable doubt \nand therefore, in the interest of justice, the Impugned Order be set \naside by acquitting the petitioner.\n\nSUBMISSIONS BY THE RESPONDENT-STATE:\n\n10.  Per  contra,  learned  counsel  for  the  State  of  Karnataka  submitted \nthat Courts below have rightly convicted and sentenced the accused \nbased  on  cogent  grounds  and  the  same  does  not  call  for  any \ninterference  by  this  Court.    It  was  submitted  that  without  repaying \nthe loan, the accused has sold the vehicle to PW4 and forged Exs. \nP8 to P10. The disputed documents were forwarded to a handwriting \nexpert  along  with  the  admitted  signature  and  handwritings  of  the \naccused. The expert report (Ex. P28) fully supports the case of the \nprosecution. Further, PW5, the Divisional Manager of the Company, \nhas specifically deposed that he never signed and issued Exs. P8, \nP9 and P10. It was submitted that the evidence on record sufficiently \ndemonstrates  that  it  is  the  accused  alone  who  is  the  author  of \nthe  forged  and  fabricated  documents.  In  these  circumstances,  it \nwas  canvassed  that  the  prosecution  had  proved  the  case  beyond \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2271\n\nreasonable  doubt.  On  these  grounds,  learned  counsel  prayed  for \ndismissal of the instant petition. \n\nANALYSIS, REASONING & CONCLUSION:\n\n11.  We  have  heard  learned  counsel  for  the  parties  and  perused  the \nevidence on record as well as the orders of the Courts below. The \nissue  before  us  is  whether  the  petitioner  is  guilty  of  committing \noffences  under  Sections  406,  420,  468,  465  and  471  IPC,  and  if \nso, whether the sentences imposed on him by the Trial Court and \nconfirmed by the Appellate Court and High Court call for interference.\n\n12.  The  accused  has  not  denied  availment  of  the  loan  from  the \nCompany and the subsequent sale of the vehicle made in favour of \nSavithramma. However, he has taken the specific defence that he \nhad  cleared  the  loan  and  closed  the  account.  PW1,  the  informant \nwho was working as Manager in the Company, has specifically stated \nin his evidence that the accused had not cleared the loan and got \nthe hypothecation cancelled on the basis of forged documents. He \nhas stated that Exs. P8, P9 and P10 are not issued by the Company \nand has identified them as forged documents. PW1 has admitted the \npayment of 2-3 instalments made by the accused. As per the terms \nof the Agreement, if any customer commits default in payment of 5 \ninstalments,  the  Company  is  empowered  to  seize  the  vehicle.  He \nhas further stated that the Investigating Officer collected the sample \nwritings and signatures of the Divisional Manager of the Company \nas Exs. P13 and P14. Similarly, the writing of the accused was also \ncollected as Exs. P15 and P16. These documents were sent to the \nhandwriting expert for examination. This witness further stated that \nExs. P11 and P12 are the standard sample receipt and No-Objection \nCertificate  which  the  Company  issues  to  its  customers  and  these \ndocuments are prepared in duplicate and one copy is retained with \nthe  Company.  It  was  further  deposed  that  as  per  the  Company’s \nrules, after clearance of the loan, the No-Objection Certificate is to \nbe issued after one week. \n\n13.  PW3-Nagabhushana  is  a  Legal  Executive  in  the  Company  and \nhe has supported the statement of PW1. PW5-Nandakumar is the \nDivisional Manager of the Company. According to this witness, after \nthe  repayment  of  the  entire  loan  by  the  customer  the  concerned \nbranch forwards the file seeking No-Objection Certificate from him \n\nV.D. Raveesha v. The State of Karnataka\f2272 \n\n[2024] 10 S.C.R.\n\n(PW5). He has specifically stated that the case-file pertaining to the \naccused’s loan has never come to his office and he had not issued \nEx.  P10  at  any  point  of  time.  He  has  denied  the  signature  on  Ex. \nP10 as being his and deposed that the document is forged.\n\n14.  PW8-Venkataramaiah  is  a  Junior  Executive  in  the  Company.  He \nhas  deposed  that  during  the  relevant  period  when  the  accused  is \nstated to have repaid the loan, he was working as a cashier in the \nrelevant branch. He has specifically stated that being cashier of the \nCompany’s branch, he has not issued Ex. P9 and has not received \nany payments from the accused. This witness has also deposed that \nthe Investigating Officer had obtained the signatures and writings of \nthe accused as also PW5. \n\n15.  PW4-the husband of Savithramma has stated that he purchased the \nvehicle  from  the  accused  in  the  name  of  his  wife.  He  also  stated \nthat  the  accused  on  his  request  brought  the  Clearance  Certificate \nfrom  the  office  of  the  RTO,  Nelamangala.  PW9-Dinesh  Kumar  is \nthe Police Sub-Inspector who has deposed about receiving Exs. P9 \nand 10 from RTO, Nelamangala. He further states that he forwarded \nthe sample handwritings, signatures and Exs. P8 to P10 along with \nsample documents secured from PW1 being Exs. P11, P12 and P19 \nto the handwriting expert.\n\n16.  PW11-Syed Asgar Imam is a retired Assistant Director of the Forensic \nSciences Laboratory, Bangalore. This witness is an expert witness \nin the case and had submitted an expert report being Ex. P28. This \nwitness has specifically deposed that the signatures found on Exs. \nP8 and P9 were forged. This witness also specifically stated that it \nwas the accused who had made the D5, D6 and D7 signatures on \nEx. P10. It was stated that the signatures found on these documents \nwere  not  the  signatures  of  PW5,  who  is  the  competent  person  to \nissue these documents on behalf of the Company. \n\n17. \n\nIt  is  undoubtedly  true  that  some  of  the  prosecution  witnesses  are \nofficials working in the Company, but just for that reason they cannot be \ntermed as interested witnesses. Except a bald allegation, no material \nhas been placed on record by the accused to show any enmity or  \nill-will against him by these witnesses, to bolster the argument of false \nincrimination. As stated earlier, the accused took a specific defence \nthat  he  had  repaid  the  entire  loan  amount.  However,  nothing  has \nbeen  produced  to  show  how  the  amount  was  repaid,  when  it  was \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2273\n\n18. \n\nrepaid,  and  by  which  mode  it  was  repaid.  Having  taken  a  specific \ndefence, it was for the accused to lead evidence and probabilize his \ndefence. In our view, the accused has failed in this regard. \n\nIn fact, the Court is a little surprised as to how the petitioner, even \nbefore  this  Court,  has  taken  the  stand  that  the  documents  are \ngenuine and not forged and/or fabricated, when the entire evidence, \nboth  oral  as  well  as  documentary,  clearly  reveal  to  the  contrary. \nMoreover, there is no record, whatsoever, forthcoming to show that \nthe  accused  had  repaid  the  loan.  Obviously,  the  act  of  repayment \nof  the  loan,  had  the  petitioner  actually  paid  back  the  loan,  could \nhave been demonstrated by bringing before the Courts documents \nto indicate that money was transferred from his account/source to \nthe financier-Company. This has not been done.\n\n19.  At  this  stage,  and  subject  to  what  we  have  stated  infra,  it  would \nsuffice to say, that for the purposes of establishing the petitioner’s \nguilt, there was sufficient and reliable material, which rightly the Courts \nbelow have believed and relied upon.  Thus, no infirmity in the same \nhaving  been  found,  the  conviction  needs  no  interference.    On  the \npoint of sentencing, we find that the Trial Court’s view, affirmed by \nthe High Court, may need some tinkering, which we shall deal with \nin  the  penultimate  paragraph.    Needless  to  state,  the  sentence(s) \nawarded to the petitioner shall run concurrently.\n\n20. \n\nIn Delhi Race Club (1940) Limited v State of Uttar Pradesh (2024) \n10 SCC 690, a recent decision by a Coordinate Bench of this Court, \nit has been elucidated as under:\n\n‘Difference  between  criminal  breach  of  trust  and \ncheating\n\n35. This Court in its decision in S.W. Palanitkar v. State \nof Bihar [S.W. Palanitkar v. State of Bihar (2002) 1 SCC \n241 : 2002 SCC (Cri) 129] expounded the difference in the \ningredients required for constituting of an offence of criminal \nbreach of trust (Section 406 IPC) vis-à-vis the offence of \ncheating  (Section  420).  The  relevant  observations  read \nas under : (SCC p. 246, paras 9-10)\n\n“9. The ingredients in order to constitute a criminal \nbreach  of  trust  are  :  (i)  entrusting  a  person  with \nproperty or with any dominion over property; (ii) that \n\nV.D. Raveesha v. The State of Karnataka\f2274 \n\n[2024] 10 S.C.R.\n\nperson entrusted : (a) dishonestly misappropriating \nor  converting  that  property  to  his  own  use;  or  (b) \ndishonestly  using  or  disposing  of  that  property  or \nwilfully suffering any other person so to do in violation \n(i)  of  any  direction  of  law  prescribing  the  mode  in \nwhich such trust is to be discharged, (ii) of any legal \ncontract made, touching the discharge of such trust.\n\n10. The  ingredients  of  an  offence  of  cheating  are  :   \n(i) there should be fraudulent or dishonest inducement \nof  a  person  by  deceiving  him,  (ii)(a)  the  person  so \ndeceived should be induced to deliver any property \nto  any  person,  or  to  consent  that  any  person  shall \nretain  any  property;  or  (b)  the  person  so  deceived \nshould  be  intentionally  induced  to  do  or  omit  to  do \nanything  which  he  would  not  do  or  omit  if  he  were \nnot so deceived; and (iii) in cases covered by (ii)(b), \nthe act of omission should be one which causes or is \nlikely to cause damage or harm to the person induced \nin body, mind, reputation or property.”\n\n36.  What  can  be  discerned  from  the  above  is  that  the \noffences  of  criminal  breach  of  trust  (Section  406  IPC) \nand cheating (Section 420 IPC) have specific ingredients:\n\nIn order to constitute a criminal breach of trust (Section \n406 IPC)\n\n(1)  There  must  be  entrustment  with  person  for \nproperty or dominion over the property, and\n\n(2) The person entrusted:\n\n(a)  Dishonestly  misappropriated  or  converted \nproperty to his own use, or\n\n(b) Dishonestly used or disposed of the property \nor  wilfully  suffers  any  other  person  so  to  do  in \nviolation of:\n\n(i) Any direction of law prescribing the method \nin which the trust is discharged; or\n\n(ii)  Legal  contract  touching  the  discharge  of \ntrust  (see:  S.W.  Palanitkar  [S.W.  Palanitkar  v. \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2275\n\nState of Bihar (2002) 1 SCC 241 : 2002 SCC \n(Cri) 129] ).\n\nSimilarly, in respect of an offence under Section 420 \nIPC, the essential ingredients are:\n\n(1) Deception of any person, either by making a false \nor  misleading  representation  or  by  other  action  or \nby omission;\n\n(2) Fraudulently or dishonestly inducing any person \nto deliver any property, or\n\n(3)  The  consent  that  any  person  shall  retain  any \nproperty and finally intentionally inducing that person \nto do or omit to do anything which he would not do \nor omit (see : Harmanpreet Singh Ahluwalia v. State \nof Punjab [Harmanpreet Singh Ahluwalia v. State of \nPunjab (2009) 7 SCC 712 : (2009) 3 SCC (Cri) 620]).\n\n37. Further, in both the aforesaid sections, mens rea i.e. \nintention  to  defraud  or  the  dishonest  intention  must  be \npresent, and in the case of cheating it must be there from \nthe very beginning or inception.\n\nxxx\n\n40.  To  put  it  in  other  words,  the  case  of  cheating  and \ndishonest  intention  starts  with  the  very  inception  of  the \ntransaction. But in the case of criminal breach of trust, a \nperson who comes into possession of the movable property \nand  receives  it  legally,  but  illegally  retains  it  or  converts \nit to his own use against the terms of the contract, then \nthe question is, in a case like this, whether the retention \nis  with  dishonest  intention  or  not,  whether  the  retention \ninvolves  criminal  breach  of  trust  or  only  a  civil  liability \nwould depend upon the facts of each case.\n\n41. The distinction between mere breach of contract and \nthe offence of criminal breach of trust and cheating is a \nfine one. In case of cheating, the intention of the accused \nat  the  time  of  inducement  should  be  looked  into  which \nmay  be  judged  by  a  subsequent  conduct,  but  for  this, \nthe subsequent conduct is not the sole test. Mere breach \n\nV.D. Raveesha v. The State of Karnataka\f2276 \n\n[2024] 10 S.C.R.\n\nof contract cannot give rise to a criminal prosecution for \ncheating unless fraudulent or dishonest intention is shown \nright from the beginning of the transaction i.e. the time when \nthe offence is said to have been committed. Therefore, it \nis this intention, which is the gist of the offence.\n\n42. Whereas, for the criminal breach of trust, the property \nmust have been entrusted to the accused or he must have \ndominion  over  it.  The  property  in  respect  of  which  the \noffence  of  breach  of  trust  has  been  committed  must  be \neither the property of some person other than the accused \nor the beneficial interest in or ownership of it must be of \nsome other person. The accused must hold that property \non trust of such other person. Although the offence i.e. the \noffence of breach of trust and cheating involve dishonest \nintention, yet they are mutually exclusive and different in \nbasic concept.\n\n43. There is a distinction between criminal breach of trust \nand cheating. For cheating, criminal intention is necessary \nat the time of making a false or misleading representation \ni.e. since inception. In criminal breach of trust, mere proof \nof  entrustment  is  sufficient.  Thus,  in  case  of  criminal \nbreach of trust, the offender is lawfully entrusted with the \nproperty,  and  he  dishonestly  misappropriated  the  same. \nWhereas, in case of cheating, the offender fraudulently or \ndishonestly induces a person by deceiving him to deliver \nany property. In such a situation, both the offences cannot \nco-exist simultaneously.\n\nxxx\n\n55. It is high time that the police officers across the country \nare imparted proper training in law so as to understand the \nfine distinction between the offence of cheating vis-à-vis \ncriminal breach of trust. Both offences are independent and \ndistinct. The two offences cannot coexist simultaneously in \nthe same set of facts. They are antithetical to each other. \nThe two provisions of IPC (now BNS, 2023) are not twins \nthat they cannot survive without each other.’\n\n(emphasis supplied)\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R.  \n\n2277\n\n21.  Though,  having  regard  to  the  afore-enumerated  position  of  law, \non  an  overall  conspectus  of  the  factual  aspects  juxtaposed  with \nthe  evidence  on  record,  as  regards  fulfilment  of  the  ingredients  of \nSections 406 and 420 of the IPC, at first sight, it may appear that \nthe  petitioner  cannot  be  convicted  both  under  Sections  406  and \n420 of the IPC, but, in the present case, on a proper consideration \nof  the  issue  in  its  entirety,  there  is  a  fine  distinction  inasmuch  as, \nthere  are  two  different  persons  against  whom  the  petitioner  has \ncommitted the respective offences under the Sections supra: first, the \nCompany and second, Mallikarjuna (PW4 and husband of purchaser \nSavithramma). Thus, in the facts and circumstances of the present \ncase, evidently the petitioner is guilty of offence committed against \nthe  Company  punishable  under  Section  406  of  the  IPC  and  also, \nof  offence  committed  against  Mallikarjuna  (PW4  and  husband  of \npurchaser Savithramma) punishable under Section 420 of the IPC.\n\n22.  Accordingly,  for  reasons  aforesaid,  the  criminal  Special  Leave \nPetition(s)  stands  dismissed,  upholding  the  Impugned  Order,  with \nthe distinguishment of the offences committed supra and by, in the \ninterest  of  justice,  reducing  the  sentence(s)  awarded  to  one  year \nand  six  months’  Simple  Imprisonment.  From  the  bail  application  it \ntranspires that the petitioner has already surrendered and presently \nis  lodged  in  Central  Prison,  Parappana Agrahara,  Electronic  City \nPost, Bangalore. Thus, he is directed to serve the remaining period \nof  the  sentence  as  per  this  order.    This  shall  be  notwithstanding \nthat  vide  Record  of  Proceedings  of  even  date,  we  had  dismissed \nthe matter(s) simpliciter.\n\n23.  Registry shall communicate the order to the Superintendent, Central \nPrison,  Parappana  Agrahara,  Electronic  City  Post,  Bangalore \nforthwith.\n\n24.  We do not propose to make an order as to costs. Pending I.A.s do \n\nnot subsist for consideration and are closed.\n\nResult of the case: SLP dismissed.\n\n†Headnotes prepared by: Ankit Gyan\n\nV.D. Raveesha v. The State of Karnataka\f"}