A mere breach of contract does not constitute cheating under criminal law without evidence of fraudulent intent at the time of the contract's formation.

JUDGMENT :

SHAMPA DUTT (PAUL), J.

1. The revisional application has been preferred praying for quashing of the order dated March 23, 2021 passed by the learned Chief Metropolitan Magistrate, Calcutta in Complaint Case No. C/19/2021 rejecting the petition under Section 156 (3) of the Code of Criminal Procedure, 1973.

2. The petitioner’s/complainant’s case is that the Petitioner had dealings with the Opposite Party No. 2, through its Directors, Ram Kumar Singhee and Mr. Damodar Das Singhee, the Opposite Parties No. 3 and 4 respectively, over the past 7 years during which time, the Petitioner routinely placed orders for copper wires at the market rate prevailing on the day of the order being placed from time to time.

3. In the month of February 2020, the Petitioner was approached by the Opposite Parties No. 2 to 4, with a new proposal. The Opposite Parties promised to supply copper wires at pre-fixed agreed prices with delivery set at a future date by giving a proposal of hedging the prices of the raw copper with London Metal Exchange (hereinafter for the sake of brevity referred to as "LME"), i.e., raw copper would be booked for future supply at pre-fixed prices with LME by the Opposite Party No. 2 on behalf of the Petitioner, and after taking supply of the raw copper at its factory, Opposite Party would manufacture the necessary copper wire from the same and supply the same to the Petitioner at pre-fixed prices. Given that raw copper prices were relatively low at that point of time, the Opposite Parties No. 2 to 4 were successful in painting a rosy picture representing that copper prices were expected to only increase in the future and therefore the Petitioner would do well to enter into such advance/forward contract at fixed price for purchase of copper wires in the future, and by such representations, the Opposite Parties No. 2 to 4 induced the Petitioner to enter into the aforesaid contract with the Opposite Party No. 2 and part with huge sums of money on the promise of future delivery of copper wires at pre-fixed agreed rates irrespective of any future increase or other fluctuation in raw copper prices at the time of delivery. The initial inducements made by the Opposite Parties No. 2 to 4 are encapsulated in the e-mails exchanged between the parties in the months of February and March, 2020, which are summarized herein below. Vide the e-mail dated February 22, 2020, the Opposite Party No. 3 categorically recommended the LME which according to the Opposite Party No. 3, "unlike any other metal exchange is considered as best platform to hedge the Non-Ferrous metal because of many reasons". The representation made by the Opposite Party No. 3 was to the effect that so far as raw copper is concerned, the Opposite Party No. 2 would be acting as more of a middle man who could be entrusted to book the copper through its LME Category - I broker in London with assured delivery from LME, and thereafter the Opposite Party No. 2 would make the copper wires out of such raw copper and supply the same to the Petitioner. The said fact is further borne out by the detailed steps of hedging as elaborated in the e-mail dated February 22, 2020 wherein:-

i. There is a clear acknowledgment that the margin money was being entrusted to the Opposite Party no. 2 for specific purpose of booking of raw copper and which was to be released upon 100% payment for physical delivery.

ii. This is further borne out by the important notice contained in the said e-mail that "Tamra is only pricing on buyer instruction and all profit and loss raising out of future pricing is to the buyer account only".

iii. As w