The issuance of a post-dated cheque for goods already delivered, without dishonest intention or knowledge of insufficiency of funds, does not constitute the offence of cheating under Section 420 of the Indian Penal Code.

The accused in C.C. 610 of 1979 on the file of the Additional Judicial Magistrate of the First Class, Ernakulam are the petitioners in this Criminal Miscellaneous Petition filed under Section 482 of the Code of Criminal Procedure, 1973. The above complaint was filed by the 1st respondent herein under Section 200 of the Cr.P.C. for offences under Section 420 read with Section 34 of the Indian Penal Code. The 1st respondent supplied few lorry loads of scrap iron to Messrs. Standard Steel and Allied Products, Bangalore, a business concern run by the petitioners-accused. According to the 1st respondent, on behalf of the other petitioners, the 1st petitioner made representations to the 1st respondent at Ernakulam that the petitioners will make payment for the goods after they are delivered at Bangalore. The lorry charges will be paid as soon as the goods are delivered at Bangalore and the value of the goods will be sent later along with the additional copy of the invoice enclosed with the way bill. It was under the above arrangement that the 1st respondent supplied the goods to the petitioners. All the cheques issued for the value of the goods were returned by the Bank with the endorsement 'refer to drawer'. The complaint in question was filed in respect of the cheque issued by the petitioners on 2-7-1979, on receipt of the first consignment despatched by the petitioners as per invoice dated 26-6-1979 and which was returned by the Bank with the endorsement 'refer to drawer'. The averment in the complaint is that the petitioners-accused at the time they made the representation that they will effect the payment after the goods were received at Bangalore had not the intention to pay the Ist respondent the price of the goods they intended to purchase. There is also a further averment in the complaint that but for the representation made by the petitioners which the 1st respondent-complainant believed the complainant would not have sent the goods to Bangalore. There is no averment in the complaint that at the time when the petitioners issued the post-dated cheque in question the petitioners had no money in the Bank or the petitioners never intended to make funds available in their account by the time the cheque was presented for payment. The point that arises for consideration is whether going by the complaint an offence of cheating has been made out and, if not, should this court quash the complaint in exercise of its inherent powers under Section 482, Cr.P.C.

2. In Raghunathan v. Balasubramonyam, (1967 Ker LT 232), Sadasivan J., has relied on Chidambaram Chettiar v. Shanmugham Pillai (AIR 1938 Mad 129) : (1938-39 Cri LJ 261) wherein it has been held :

"A post-dated cheque in payment of goods already received is a mere promise to pay on a future date and a broken promise is not a criminal offence, though it may amount in certain business relations to discreditable behaviour."

In the above decision Sadasivan, J. has also referred to Asad Ali Tahsildar v. Answar Ali (AIR 1959 Tripura 40) : (1959 Cri LJ 1216) wherein it has been held :-

"It is well settled that a mere breach of a contract cannot give rise to a criminal prosecution ........ The distinction between a case of mere breach of contract and one of cheating therefore depends upon the intention of the accused at the time of the alleged inducement."

In Sreethara Kamath v. Jawala Prasad Gupta, (1970 Ker LT 45) Krishna Iyer, J., as he then was, has held :

"If a person gives a cheque which is dishonoured and from the circumstances it could be presumed that he must have been aware and even intended that the cheque would be and should be dishonoured, he would prima facie be guilty under Section 420. The position would be otherwise if he had no knowledge then that he had no sufficient money in the Bank issuing the cheque .......... A post-dated cheque is a representation about a future event, the holding out of a hope rather than the representation of a present fact and if su