A breach of contract does not constitute cheating unless fraudulent intent is proven at the outset of the agreement, as established in relevant legal precedents.

JUDGMENT :

Shampa Dutt (Paul), J.

1. The present revisional application has been preferred praying for quashing of the proceeding pending before the Learned Metropolitan Magistrate 9th Court, Kolkata, in connection with Complaint Case no. C.S. 32544 of 2019, under Sections 406 /409/420/120B of the INDIAN PENAL CODE , 1860.

2. The petitioner’s case herein is that the petitioner no. 1 is a company within the meaning of the Companies Act, 1956, having its Registered office as mentioned in the cause title. The petitioners no. 2, 3 & 4 are the Directors of the petitioner no.1.

3. The petitioners no. 2, 3 & 4 being the directors of the petitioner no. 1 are in full charge of the day to day affairs and/or business of petitioner no. 1 and they take all necessary decisions on behalf of the petitioner no. 1/company.

4. The petitioners state that the petitioner no. 1/company deals with the business of export & import and the petitioners are doing such business for a considerable period of time with great reputation.

5. For the purpose of smooth running of the aforesaid business the petitioners used to obtain financial assistance from various banks and other financial institutions. The petitioners further state that in the year 2016, the petitioners being aware of the name of opposite party no. 2 being a company, who used to provide financial assistance to individuals and companies, approached the opposite party no. 2 for a loan and/or financial accommodation to the tune of Rs. 50 Lakhs.

6. After proper verification and inspection, the opposite party no. 2 agreed to provide and/or disburse a loan to the tune of Rs. 50 Lakhs and accordingly on 21.03.2016 the said amount was transferred through RTGS/NEFT in favour of the petitioner no.1. It was further agreed that the entire money will be repaid within March 2017, if not extended further.

7. After such disbursement and/or entrustment of the money the petitioners started paying the installments each and every month without any default. But in the month of December 2016 the petitioners decided to foreclose the loan, which was obtained from the opposite party no.2 by paying the residue amount, which was supposed to be paid within March 2017. And to discharge the liability to pay, the petitioners called upon the opposite party no. 2 and expressed the petitioners willingness to repay the residue amount.

8. The opposite party no.2 agreed to the proposal made by the petitioners and accordingly received the residue amount in cash in the month of December 2016. The petitioners were further assured by the opposite party no. 2 that no further documentation was required to prove that the petitioners had discharged their liability to pay and that the aforesaid transaction had come to an end. Since then no further transaction and/or any loan accommodation was ever obtained from the opposite party no. 2.

9. It is stated that now a purported case has been initiated by the opposite party no. 2 under Sections 406 /409/420/120B of the INDIAN PENAL CODE against the petitioners alleging that the petitioners have neglected to pay the loan amount since December 2016 and in spite of repeated reminders and/or demand made by the opposite party no. 2, the petitioners did not pay and further threatened the opposite party no. 2 with dire consequences.

10. On the basis of aforesaid allegation a complaint case was registered being complaint case no. 32544/2019 under Sections 406 /409/420/120B of the INDIAN PENAL CODE against the petitioners.

11. The petitioners submit that in the Month of December, 2016 the petitioners to discharge their liability had already paid the substantial amount in cheque as well as in cash, which was supposed to paid before March, 2017 to the o