The dispute regarding the hire purchase agreement was of a civil nature and did not amount to cheating under Section 420, I.P.C.

This petition for quashing the proceedings in GC. No. 386 of 1987 on the file of the Judicial I Class Magistrates No. 1, Madurai, has been filed by the petitioner. The charge against him is that he obtained a loan from the complainant. Tawrus Hire Purchase Private Limited, Madurai, on a hire purchase agreement in respect of Ambassador Car TDZ 8964 purchased by him on 23-9-1986. As per the Hire Purchase agreement the loan amount was Rs. 1,08,000/-. The petitioner has repaid a sum of Rs. 35,582/- as per his affidavit. He was regularly paying the hire purchase amount of Rs. 72418/-. The petitioner informed the theft of the said car to the complainant on 5-4-1987 by a telegram and the complainant is fully aware of the theft of the said car and a case was registered in D-6 Anna Square Police Station. In spite of it, the complainant has filed a report before the respondent for an offence under Section 420, I.P.C. and the police has registered a case in Cr. No. 27/87. As per the F.I.R. given by the complainant it is seen that the complainant had advanced a sum of Rs. 1,08,692/- which includes principal and interest of Rupees 23,986-00 for the abovesaid car. According to the Hire purchase agreement the hirer-accused herein should remit the monthly instalments due to them at the rate of Rs. 3367/- on 23rd of every month for a period of 36 months commencing from October, 1986, but the accused failed to do so and he has paid only a sum of Rs. 9000/-. It appears that the hirer sold the vehicle without their knowledge and without clearing the amounts due to them. Therefore, the accused has violated the conditions of the Hire purchase agreement and cheated the company. It is also learnt through some source that the car was plying in suburban area. Therefore they filed a report before the respondent. There are two accused in this case. First accused is the hirer and the second accused is the surety. Therefore the charge was against both the accused under Section 420 r/w 34, I.P.C.

2. The learned counsel for the petitioner contended that this is a dispute regarding the Hire Purchase agreement and that no offence is made out under Section 420, I.P.C. The complainant himself has stated in the FIR that the accused have violated the conditions of the Hire Purchase agreement entered into and thereby cheated the complainant. Even as per the Hire purchase agreement it is open to the complainant to seize the vehicle if the instalments are not regularly paid. But that would not amount to cheating if the car is not available either by means of sale or otherwise. It is only the breach of the conditions of the Hire purchase agreement and it is only a dispute of civil nature. Section 420, I.P.C. reads as follows :-

"420. Cheating and dishonestly inducing delivery of property : Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine".

3. The learned counsel for the petitioner contended that as per Section 420, I.P.C. ingredients of Section 420 have not been made out in this case and even if the complaint is taken as it appears in the F.I.R. it does not disclose an offence under S. 420, I.P.C. It may be breach of the conditions of the Hire purchase agreement and the accused may be liable for damages to the complainant. In this view I am unable to find that prima facie case has been made out against the accused by the complainant and therefore the complaint is liable to quashed. Accordingly the proceedings in C.C. 386 of 1987 on the file of the Judicial I Class Magistrate No. 1, Madurai, are quashed. The Crl.M.P. is allowed.

Petition allowed.