The main legal point established in the judgment is that not every breach of contract gives rise to criminal prosecution for cheating or criminal breach of trust. The court emphasized that the intention to cheat or commit a breach of trust must be present at the inception of the transaction to constitute a criminal offence.

JUDGMENT :

1. This criminal petition is preferred under Section 482 of the Code of Criminal Procedure, 1973 (‘the Code’ and/or ‘CrPC’, for short) by the petitioners seeking quashing and setting aside of the criminal proceeding of Complaint Case no. C.R. 5870C/2018, presently pending before the Court of learned Sub-Divisional Judicial Magistrate No. 1, Kamrup (Metro), Guwahati (‘the trial court’, for short), and the order dated 28.11.2018 whereby the learned trial court had taken cognizance on the complaint for the offences under Sections 409/420/34, Indian Penal Code (IPC) and issued process against the petitioners as the accused to appear before the learned trial court and to stand trial.

2. The respondent as the complainant who has filed the complaint, is a proprietorship concern which carries on its business as dealers and distributors of various products and its place of business is at Guwahati, District – Kamrup (Metro), Assam. In the complaint, the petitioner no. 1 has been arraigned as accused no. 1 and it is a registered partnership firm having its office at New Delhi. The petitioner no. 2 and the petitioner no. 3 are the partners of the petitioner no. 1 firm and they have been arraigned as accused no. 2 and accused no. 3 respectively in the complaint. That apart, one Sri H.D. Ganguly has been arraigned as accused no. 4 describing him as the Area Sales Manager of the petitioner no. 1 firm.

3. The background facts, as narrated in the complaint, which led the respondent-complainant to file the complaint at issue before the learned trial court may be stated, in brief, as follows :-

3.1. The accused no. 1 is stated to have been carrying on business of spices from its head office in New Delhi and also through its branch offices / carrying & forwarding (C&F) agents at various places in the country including in the State of Assam. During May, 2013, the accused no. 2 and the accused no. 4 approached the complainant at Guwahati and represented the accused no. 1 firm as a renowned manufacturer of spices. It was represented that they were satisfied with the infrastructure of the complainant and, thus, the complainant was offered C&F agency of its products for Assam and other North Eastern States except for the areas in which the accused no. 1 firm had already appointed its dealers / agents. At the time of the offer, it was promised that the accused no. 1 firm would supply good quality products, offer competitive prices, provide full-fledged team of sales representatives for procuring orders from dealers from the entire North Eastern Region etc. which would be beneficial for both the parties.

3.2. Based on such offer, the complainant agreed to work as C&F agent of the accused no. 1 firm and after due deliberation, it was verbally agreed by both the parties that the complainant would deposit an amount of Rs.1,00,000/- as security deposit with the accused and would also keep sufficient stocks of goods in his godown for sale in the areas allotted to him as per the instructions of sales representatives to be appointed by the accused. The accused stated to have also promised to take back the unsold goods like damaged ones or where dates of the products had expired, etc. for which freight and packing charges would be borne by the complainant. For being such C&F agent, the accused would pay the complainant remuneration at the rates of (i) 3% towards C&F commission, (ii) 2% towards allied expenses and (iii) 1% towards stationary charges respectively i.e. 6% in total of the turnover.

3.3. On being so assured, the complainant deposited an amount of Rs.1,00,000/- by NEFT on 22.05.2013 as security deposit with the accused for finalization of the C&F agreement. After deposit of the security deposit, the accused had asked the complainant to place its orders and to pay in advance the prices of the goods for sales in the areas allotted to him with the promise to execute the formal agreement and to appoint sales representatives within a short period of