The case of Mahadeo Prasad vs State of West Bengal deals with Section 420 of the Indian Penal Code (IPC) which defines the offence of cheating and prescribes punishment for the offence. Mahadeo Prasad case examines the relevance of intention in relation to the offence of cheating and differentiates between civil liability and criminal liability.
DATE OF JUDGEMENT: January 13th, 1954
COURT: The Supreme Court of India
BENCH: Bhagwati, Jagannadhadas, V Ayyar
FACTS
- On May 5th, 1951, the appellant, Mahadeo Prasad, agreed to purchase 25 tin ingots from the complainant, Dulichand Kheria. These 25 ingots were to be delivered by the complainant at the appellant’s warehouse. The complainant sent his jamadar to deliver the tin ingots to the appellant. The appellant accepted delivery of the ingots but did not pay the price to the jamadar.
- The jamadar waited for a long time, but the appellant went out and did not return to the warehouse. So, the jamadar ultimately returned to the complainant and informed him that even though the delivery was accepted, no payment was made. The claimant, who was persuaded to part with these 25 tin ingots by the appellant’s offer to pay cash on delivery, realised he had been duped. Hence, on May 11, 1951, he filed a complaint in the Court of the Additional Chief Presidency Magistrate, Calcutta, accusing the appellant of cheating under Section 420 of the Indian Penal Code.
- The Additional Presidency Magistrate, Calcutta found the charge against the Appellant to be proved and convicted and sentenced him to one year of rigorous imprisonment.
- The appellant filed an appeal with the High Court of Judicature at Calcutta against his conviction and sentencing. The High Court rejected the appeal and upheld the appellant’s conviction and sentence imposed by the Additional Presidency Magistrate in Calcutta.
- The appellant filed a special leave petition challenging the decision of the High Court.
ISSUE
- Whether the appellant had the intention to cheat and had committed the offence of cheating under Section 420 of the IPC?
CONTENTIONS BY THE APPELLANT:
- The appellant claimed he had no intention of defrauding the plaintiff, that the transaction was on credit, and that the story of the promise to pay in cash was made up by the complainant to give the case a criminal complexion.
- According to the record, the appellant did not have sufficient funds in his account on the day the delivery was accepted. The bill issued to the appellant stipulated that interest at 12% per annum would be levied on the price of goods that were not paid in cash against delivery, and this stipulation showed that it was merely a case of civil liability and did not imply any criminal liability by the appellant.
- The appellant was willing to settle with the complainant and went to his shop and was arrested there while negotiating a settlement, which showed that he had no fraudulent intentions when he accepted the delivery of the ingots.
RATIO DECIDENDI
Justice PN Bhagwati: The High Court rightly observed that if the appellant had agreed to pay cash against delivery and had intended to do so that he did not pay did not transform the transaction into one of cheating.
However, if he had no intention of paying but simply stated that he would in order to persuade the complainant to part with the products, a case of cheating would be created. No question of the appellant miscalculating his willingness to pay the cash against delivery arises. He was well aware of his obligations, the funds he would get from third parties, and the payments he would be required to make.
The appellant’s anxiety about settling could easily be explained because he knew he had taken delivery of the ingots without payment of cash against delivery, and the only way he could avoid criminal liability was to settle with the complainant.
When he took delivery of the 25 tin ingots, the appellant had no intention of paying but simply agreed to pay cash against delivery in order to persuade the complainant to part with the goods.
DECISION
The Supreme Court upheld the decision of the High Court and observed that it rightly convicted the appellant of the offence. Based on the above views, the apex court found the appellant guilty of cheating under Section 420 of the Indian Penal Code and sentenced him to one year’s rigorous imprisonment.
The appeal was dismissed.
CONCLUSION
This is an important case for understanding Section 420 of the IPC. The judgement of Mahadeo Prasad v State of West Bengal laid down the rule that guilty intention or ‘Mens Rea’ is an important element to prove the offence of cheating.
When a person is convicted of cheating, it is essential to establish that the said person had the intention to cheat. Here, the guilty intention was proven, and the appellant was found guilty.
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