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2024 (11) TMI 584 - HC - GSTOnline betting - The role of GST Intelligence and its proceedings - offences under Sections 120B and 420 of the IPC and Section 66D of the Information Technology Act, 2000 - seeking more time to investigate into the matter - whether the allegations would meet the ingredients of Section 415 of the IPC and Section 66D of the Act? - HELD THAT - Section 415 of the IPC mandates that whoever by deceiving any person fraudulently or dishonestly induces the person so deceived to deliver any property to any person . Therefore, there should be a person who has been deceived and the deception should be from the inception, all with an dishonest intention to commit fraud. A perusal at the complaint would not indicate any person complaining against the petitioners. Therefore, there has been no person who has been deceived. Unless there is any person who has been hoodwinked, the ingredients under Section 415 of the IPC cannot be met. Interpretation of the offence of cheating under Section 415 of the IPC need not detain this Court for long or delve deep into the matter as the Apex Court in plethora of judgments has elucidated what is necessary for an offence under Section 415 of the IPC, for it to become punishable under Section 420 of the IPC. The Apex Court in the case of VIJAY KUMAR GHAI AND OTHERS v. STATE OF WEST BENGAL AND OTHERS 2022 (3) TMI 1527 - SUPREME COURT reiterated the entire spectrum of law with regard to criminal breach of trust and cheating and has held 'Having gone through the complaint/FIR and even the charge sheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Section 405 420 Penal Code, 1860. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out. In the instant case, there is no material to indicate that Appellants had any mala fide intention against the Respondent which is clearly deductible from the MOU dated 20.08.2009 arrived between the parties.' In the light of the elucidation by the Apex Court as afore-quoted and the facts obtaining in the case at hand, in the considered view of this Court, it would not meet the necessary ingredients of Section 415 of the IPC for it to become punishable under Section 420 of the IPC for permitting further proceedings to continue. Therefore, the offence under Section 420 of the IPC is loosely laid against these petitioners. It is the categorical statement of the State who has investigated the matter for the last 42 months three years and 6 months. No victim has come forward to complain or give evidence against these petitioners. The defence is that, the petitioners have managed. It is highly improbable that the petitioners can manage any persons, if they are aggrieved. Therefore, if further proceedings are permitted to continue against these petitioners, it would become an abuse of the process of the law. It is apposite to refer to the judgment of the Apex Court in the case of STATE OF HARYANA V. BHAJAN LAL 1990 (11) TMI 386 - SUPREME COURT - The Apex Court holds that the Court exercising jurisdiction under Section 482 of the Cr.P.C., can quash the FIR on certain circumstances. Three of the circumstances are undoubtedly present in the case at hand. Therefore, to prevent the proceedings becoming miscarriage of justice, it is deemed appropriate to obliterate the crime. It is made clear that the observations made in the course of the order is for only consideration of the petition under Section 482 of the Cr.P.C. and it would not influence or bind any pending proceedings. The criminal petition is allowed.
Issues Involved:
1. Legality of the registration of Crime No. 125/2021. 2. Applicability of Sections 120B and 420 of the IPC and Section 66D of the Information Technology Act, 2000. 3. Investigation process and its duration. 4. Determination of whether the allegations meet the ingredients of Section 415 of the IPC. 5. The role of GST Intelligence and its proceedings. 6. Abuse of the process of law and the applicability of Section 482 of the Cr.P.C. Issue-wise Detailed Analysis: 1. Legality of the Registration of Crime No. 125/2021: The petitioners, accused Nos. 1 and 2, challenged the registration of Crime No. 125/2021, which was initiated based on allegations of GST evasion and involvement in suspicious online betting activities. The crime was registered by the jurisdictional police following a complaint by GST Intelligence. The petitioners contended that the ongoing investigation, despite the absence of a clear victim, was unwarranted. 2. Applicability of Sections 120B and 420 of the IPC and Section 66D of the Information Technology Act, 2000: The petitioners argued that the allegations do not satisfy the necessary ingredients of Sections 120B (criminal conspiracy) and 420 (cheating) of the IPC, as well as Section 66D of the Information Technology Act, 2000, which pertains to cheating by personation using computer resources. The court examined Section 415 of the IPC, which defines cheating, and noted the absence of any victim who was deceived or defrauded by the petitioners. 3. Investigation Process and Its Duration: The investigation had been ongoing for over 40 months without any substantial progress or identification of a victim. The petitioners argued that this prolonged investigation was unjustified, especially since the GST Intelligence had already initiated separate proceedings under the GST laws. 4. Determination of Whether the Allegations Meet the Ingredients of Section 415 of the IPC: The court analyzed whether the allegations met the criteria for cheating as defined under Section 415 of the IPC. It emphasized that for an act to be punishable under Section 420, there must be evidence of fraudulent or dishonest inducement from the inception. The absence of a deceived person or any fraudulent intention at the beginning of the transaction led the court to conclude that the allegations did not satisfy the requirements of Section 415. 5. The Role of GST Intelligence and Its Proceedings: GST Intelligence had already initiated proceedings for tax evasion against the petitioners. The court noted that the allegations primarily concerned GST violations, which were being addressed through appropriate channels, and thus did not warrant a parallel criminal investigation under the IPC and the Information Technology Act. 6. Abuse of the Process of Law and the Applicability of Section 482 of the Cr.P.C.: The court considered whether the continuation of the criminal proceedings constituted an abuse of the process of law. Citing precedents, the court emphasized that criminal proceedings should not be used to settle civil disputes or where the allegations do not disclose a cognizable offence. The court exercised its jurisdiction under Section 482 of the Cr.P.C. to quash the FIR, finding that the circumstances justified such intervention to prevent a miscarriage of justice. Conclusion: The court concluded that the allegations against the petitioners did not meet the essential ingredients required for the offences under Sections 120B and 420 of the IPC and Section 66D of the Information Technology Act. The absence of a victim and the prolonged investigation without substantive evidence led the court to quash the proceedings in Crime No. 125/2021, thereby allowing the criminal petition. The decision emphasized the importance of preventing the misuse of criminal law for non-cognizable disputes and ensuring that legal processes are not abused.
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