IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
Permod Kohli, J.
Sirohiya Synthetics Pvt. Ltd. & Anr. - Appellant
Versus
Chenab Textile Mills - Respondent
561-A Cr.P.C. No. 71/2005
Decided On : 03 March, 2006
Cheating - Criminal Proceedings - 415 RPC, 418 RPC, 420 RPC, 34 RPC - Summary of the acts and sections referenced and discussed by the court: The court discussed the essential ingredients of the offences under sections 415 RPC, 418 RPC, 420 RPC, and 34 RPC, highlighting the fraudulent inducement, delivery of property, and causing damage or harm. It also referenced legal provisions from the Code of Criminal Procedure and Supreme Court judgments to establish the circumstances warranting interference for quashment of criminal proceedings.
Fact of the Case:
The petitioners, a Private Limited Company and its Directors, were accused of cheating by inducing the complainant to supply goods on credit basis and failing to make payments. The trial court summoned the petitioners to face trial, leading them to seek quashment of the criminal proceedings.
Finding of the Court:
The court found that the complaint did not disclose any criminal offence, as the transaction was purely commercial and civil in nature, and no criminal liability could be fastened. It concluded that the complaint and criminal proceedings were an abuse of the process of the court, warranting interference to quash the same.
Issues: The issues revolved around the allegations of cheating, fraudulent inducement, and the essential ingredients of the offences under sections 415 RPC, 418 RPC, 420 RPC, and 34 RPC. The court also considered the circumstances warranting interference for quashment of criminal proceedings.
Ratio Decidendi: The court applied the tests laid down by the Supreme Court for quashment of criminal proceedings, emphasizing the need for necessary allegations to establish criminal liability and the distinction between mere breach of contract and the offence of cheating.
Final Decision: The court quashed the complaint and criminal proceedings initiated against the petitioners, including the impugned order summoning them to face trial, and discharged the accused.
2. Petitioners have been accused of commission of offence of cheating. The trial magistrate has passed the speaking order. The facts as notified by the trial magistrate in its order are reproduced hereunder:-
"The allegations on the complaint are that accused no. 2 and 3 who are Directors of the accused no. 1, a private limited company, with common criminal intention dishonestly and fraudulently induced the complainant to part with the supply of yarn manufactured by the complainant on credit basis by making false promises, making the complainant to believe that they will make payment of the goods supplied with interest @ 24% per annum. The total price of the yarn supplied by the complainant to the accused comes to Rs. 26,31994/-. The accused have refused to make payments. By doing so, the accused have cheated the complainant to get unlawful gains and to bring unlawful loss to the complainant at the same time."
3. The set of allegations as contained in the complaint are noticed as under:-
"(2) That the accused no.1 is a Private Limited Company and accused no. 2 & 3 are its Director.
(3) That in the month of February to June 2001 the accused with common/criminal intention dishonestly and fraudulently induced the complainant at its place of business i.e Kathua (J&K) to part with the supply of yarn manufactured by it (complainant) to them (accused) on credit basis and further represented by making false promises/assurance to their (accused) knowledge making the complainant to believe that they (accused) would be making the payment of the goods supplied, to the complainant with interest at the rate of 24% p.a at Kathua (J&K) the place of business of the complainant.
(6) That the complainant on various occasions, during the supplies of goods being made, has been approaching and requesting the accused persons to make payment, but the accused persons again with dishonest and fraudulent intention, like the previous, have been making false promises to their knowledge, to the complainant that they would be making payment and in order to create belief in the complainant did make the payment of some goods by draft No.562179 dated 05.07.2002 of Rs. 8877/- and further made fraudulently false promises/assurance to pay the rest of the goods supplied or to be supplied."
4. Apart from above, the complainant/respondent has given the details of the bills of the goods supplied by it to the accused/petitioners. Goods were supplied in as many as 20 transactions w.e.f 9th March 01 to 26th June,01. Total value of the goods is said to be Rs.26,31,994/-.
5. It has been urged on behalf of the petitioner that complaint do not disclose any offence against the petitioner and thus the initiation of criminal proceedings amount to abuse of the process of the court and same are liable to be quashed. With a view to find out whether any offence is made out. I have perused the complaint and the statements recorded. Relevant part of the complaint has been noticed hereinabove. Accused persons have been summoned for commission of offence under section 415 RPC, 418 RPC, 420 RPC and 34 RPC. These sections are reproduced hereunder:-
"415 RPC -- Cheating -- Whoever, by deceiving any person, fraudulently or dishonestl
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