IMPORTANT POINT
Question of non-performance of contract, not tantamount to breach of contract.

Pinaki Chandra Ghose, J.—Leave granted.

2. This appeal is directed against an order passed by the High Court of Punjab and Haryana at Chandigarh in Criminal Misc. No. 35963-M of 2001, whereby the High Court dismissed the application filed by the appellants under Section 482 of the Code of Criminal Procedure for quashing the complaint filed under Sections 417, 418 and 420 read with Section 120-B of the Indian Penal Code and the summoning order dated 14.6.2001 passed by the Judicial Magistrate Ist Class, Chandigarh

3. The basis of the filing of the application relates to issuance of 33 cheques by the appellants during the course of its business aggregating to Rs.2,40,64,022.19 paise in consideration of the payment against steel billets and rolled products supplied to them by the complainant/respondent. On presentation, all the cheques were dishonoured on different dates culminating in lodging of 26 complaints against the appellants for the commission of offence punishable under Section 138 of the Negotiable Instruments Act. Upon notice, the appellants filed an application under Section 482 of the Code of Criminal Procedure before the High Court for quashing the said complaints.

4. The appellants on 22.7.1998 requested the complainant that he had material worth Rs. 1 crore for disposal in the shape of forging of steel flanges which he would dispose of and would make the payment of the amount to the complainant and requested the complainant to find out a customer. At the request of the complainant, M/s. Uma Shanker Khandelwal and Company Limited, New Delhi agreed to purchase the material from the appellants. The appellants agreed to pay the entire consideration to the respondent and in turn directed the said company to pay the consideration directly to the complainant against all the deliveries. The appellants further promised to clear the balance outstanding by arranging funds from its source. Relying upon such allurement and inducement of the appellants, the respondent agreed to withdraw all the complaints except one. It appears as per promise, the appellants supplied flanges to said M/s. Uma Shanker Khandelwal and Company for an amount of Rs.31,22,524/- only and directed that the amount be paid directly to the respondent.

5. The appellants thereafter induced the respondent to withdraw the 25 complaints filed under Section 138 of the Negotiable Instruments Act, on the plea that the appellants would pay the entire consideration to the respondent. The appellants also withdrew the said application filed under Section 482 of the Cr.P.C. from the High Court. However, after withdrawal of all the complaints by the respondent, the appellants neither took any step to pay the amount nor kept his commitment.

6. In these circumstances, after recording the preliminary evidence, the trial court by an order dated 12.6.2001 issued summons against the appellants as accused for commission of offence under Section 420 of the Indian Penal Code. The appellants filed an application for quashing of the said summons under Section 482 of the Cr.P.C.

7. Dr. Rajeev Dhawan, learned senior counsel appearing in support of this appeal first contended that the Judicial Magistrate, Chandigarh had no territorial jurisdiction since the agreement between the parties was entered into on 24.7.1998 at Faridabad. He further contended that the appellants having its place of business at Faridabad, it is the Court at Faridabad, which would have jurisdiction. His basic structure of the submission was that the dispute is nothing but a civil dispute and thereby jurisdiction lies at Faridabad. Secondly, he contended that since the dispute is of civil nature, the offence of cheating cannot be attracted in the facts of this case. According to him, there is no intention to deceive, therefore, the essential ingredients of the offence of cheating was not present in this case. Thirdly, he submitted that it is based on breach of contract between the parties on the ground th