please help: eligible for criminal prosecution?

[Sathish Kumar]

In 2014 my uncle and his sons approached me for big loan of 10 Lacs, for which I denied. They wanted money to pay off the loan from 3rd party who is charging high interest 3-4% per month, and to pay off the bank loan against his assets. They started to convince me a lot, that the loan amount is very secure and

“when I ask the loan amount, if they don’t have money to repay, they will sell their assets and pay my loan”

– these words created confidence in my mind. I took decision to give loan based on these wordings. pronote for 10 Lacs was executed in 50rs stamp paper, in which these wordings are included. I deposited money in uncle’s bank account.

These wordings is a loan agreement or promise or contract?

Later, when I asked him to return money over phone and in person, he said that he does not have money, he will pay after he gets money. This went on for several months. So I phoned him again, he said he will pay shortly otherwise he will sell his assets and pay my loan. same thing he told again and again, but never sold his asset. I phoned and asked to give mortgage security for my loan for which he agreed.

I live in a city which is 700km away from his home. I went to his house and called him to sub-registrar office, for which he denied. So, I asked him to sell his assets and pay the loan. He and his sons asked me – what rights do you have to talk about our assets. I reminded them about the promise they made when they took loan from me. They laughed and said, we lied to you, we made a false promise to convince you and get the money, without that lie you would not have given loan to us. I felt cheated. I said I will file case against you, to recover my loan. My uncle
said he will also approach court and file for insolvency.

within a week, uncle gave his 3 properties to daughter as gift settlement in Dec2016. I issued lawyer notice to him on Jan2017 to pay my loan amount, then I filed money recovery suit, in which I’m unable to get attachment of properties in daughter name, because she did not sign in pronote and not party of the money suit. He has not filed the written statement yet. He also filed for insolvency stating that he is unable to pay his debts and listed me as creditor. He did not list his property. Lawyer said IP can be easily dismissed.

Now, the uncle, sons and daughter are trying to dispose the properties and make cash, settle in a different place. They have already entered into a unregistered sale agreement for one property.

I feel civil suit is not enough to recover my money. If they undergo criminal prosecution, they will definitely come for loan settlement, fearing of jail.
They have cheated me well. They gave me false promise to get loan from me. Later they did not fulfill the loan agreement and gifted his assets, filed for insolvency.

Please suggest me how to prosecute them under criminal case. what sections apply?

I have the following evidence:
1) pronote executed in 50rs stamp paper
2) NEFT receipts showing transfer loan amount in his bank account
2) EC showing the gifts to daughter.
3) certified copy of this gift deed documents.
4) lawyer notice copy and plaint copy of money recovery suit.

[Dr. Ashok Dhamija]

For filing a criminal case against your uncle for the above loan transaction, you’ll have to prove that he had the dishonest intention since the beginning itself to cheat you, by inducing you to deliver the money to him as a loan on the false promise of selling his property if he was not able to repay the loan. His subsequent conduct of transferring his properties to his daughter by way of gift and then filing for insolvency to avoid creditors like you, may further substantiate your case.

Section 420 IPC is reproduced below:

“420. Cheating and dishonestly inducing delivery of property.—Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

Section 420 IPC is dependent on Section 415 IPC wherein the expression “cheating” is defined. Main part of Section 415 IPC is as under:

“415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. … …”.

There appear to be many lapses on your part. It is not generally advisable to give opinion on facts of a case without actually seeing the detailed facts. You may show your detailed facts to some local lawyer. Depending on the detailed facts of your case, it may perhaps be possible for you to file a case under Section 420 IPC against him.

     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Sathish Kumar]

Mr. Ashok Dhamija,
Thanks for your reply. Please give me some clues or examples to prove dishonest intention since the beginning itself to cheat me.

My lawyer says to file a “Suit for declaration with injunction” to declare the gift deed to daughter as invalid and void, citing the facts that on demand of loan, debtor breached the loan agreement in pronote, debtor instead of selling the property and returning my money, gave all his three properties as gift settlement to daughter with malafide intentions in a view to escape from court attachments and proceedings of his properties, he made this fraudulent transfer to cheat the
creditors. He also filed for insolvency which shows his clear intentions to cheat the creditors.

To remind you, pronote for 10 Lacs was executed in 50rs stamp paper, in which father and his sons agreed that:

“On demand we will pay the loan with interest. when you demand the loan amount, if we don’t have money to repay, we will sell our assets and pay your loan.”

Lawyer says, the above line is very important for this case, based on which “Suit for declaration” to be filed.

Is this true? what are the chances of winning this case? If the gift deed is declared as void, then I can seek attachment of properties in my money recovery suit.

[Dr. Ashok Dhamija]

For example, he deliberately gave you the false promise of selling his property to repay the loan, if needed, but if he had no such intention since the beginning only. His subsequent conduct of transferring the property to daughter by way of gift substantiates this.

As regards the facts of the case in detail, I cannot comment. Please take advice of your lawyer who would have seen the detailed facts.     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Sathish Kumar]

If possible and you have time, please help me.

I filed a complaint in local police station, citing the above facts, requesting police to file FIR and produce uncle and his 2 sons before Judge for cheating 420 and criminal breach of trust 406.

police denies to accept my complaint as uncle says the civil case is pending for the same matter.

whether above criminal case is maintanable while the civil case for the same cause of action is pending?

what other sections applicable other than 420 and 406?

Now, the uncle, sons and daughter are trying to dispose the properties and make cash, settle in a different place. So, I’m planning to file declaration suit to declare the property settlement to daughter as null and void.

whether above criminal case is maintanable when I file declaration suit in the next 15 days?

I consulted few local lawyers, who are not sure of above issues. Please help me.

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