Police arrests under Ground of section 420 and 406

A person say X stays in Guwahati, Assam under the Jalukbari Police Station.His friend say Y goes to the Officer-in-charge(short form-OC) and has an understanding with the OC.The OC tells his sub-officers to go and bring Mr.X to the police station.The reason he was brought to the police station was because of the complaint given by Mr.Y who told the OC that Mr.X had taken 7 lakh Rupees from him for Setting up of a wine shop and its licence.Mr.Y is a cousin of Mr. X who stays at his own home.Now, comes the real twist. Mr.Y has a deposit slip of the 7 lakh rupees that he has given to Mr.X in his bank account.And Mr. Y also shows the OC the xerox copy of the cheque that was given by Mr. X AGAINST the 7 lakh rupees money he had taken for the setting up of a wine shop for Mr.Y.However,Mr.X denies that he had not taken the money from him and that they two were engaged in some other business.Mr. X tells the OC that Y had withdrew the money according to bank statement.OC arrests X and jailed.