The judgment established that the mere default in paying monthly instalments under a hire purchase agreement does not necessarily indicate dishonest intention to cheat at the inception of the agreement, and therefore, may not constitute the offence of cheating.

The petitioners who are accused 1 and 2 in C.C.No.7878 of 2002 on the file of the learned II Metropolitan Magistrate, Egmore, Chennai, wherein they are facing trial for the alleged offence under Section 420 read with 34 IPC have filed the above quash petition seeking to quash all further proceedings therein.

2. The brief facts which are necessary for the disposal of the above Criminal Original Petition and as culled out from the complaint filed by the respondent against the petitioners herein are set out below:-

It is alleged that the accused approached the complainant to grant hire purchase facility in respect of a vehicle bearing Registration No.TN-60-1047, make M & M Cab, Model 1993 and thereby promising to repay the amount under the hire purchase agreement. Believing the representation of the accused to be true and genuine, the complainant on good faith and belief, sanctioned the hire purchase loan amount of Rs.1,71,000/-payable in thirty monthly instalments. The second accused stood as a guarantor. After paying some instalments, the hirer committed default on the payment of the monthly instalments and a sum of Rs.98,200/-was due under the hire purchase agreement. It is alleged that the accused have sold the vehicle by fabricating the false document to a third party while the hire purchase agreement is in force. Thus, according to the complainant, the accused have committed an offence under Section 420 read with 34 IPC.

3. When the above Criminal Original Petition was taken up for final disposal, the learned counsel for the petitioners was absent and the learned Amicus Curiae for the respondent was present.

4. Learned Amicus Curiae for the respondent submitted that having committed default in paying the monthly instalments, the accused have fabricated the documents and sold the vehicle, which is a subject matter of the hire purchase agreement to a third party and thereby have cheated the complainant. She further submitted that in paragraph 6 of the complaint it is stated that the accused with dishonest intention to cheat the complainant induced him to sanction the hire purchase facility in respect of the vehicle to accused 1 and 2 and executed the hire purchase agreement and subsequently failed to repay the amount to the tune of Rs.98,200/-due under the hire purchase payment, but contrary to that, the first and second accused sold the vehicle by fabricating the documents to the third party and cheated the complainant; according to the learned counsel, the said averments do constitute the ingredients of the offence of cheating. She further submitted that simply because a civil remedy is available to the complainant, it does not mean that he should pursue only the civil remedy, but if a criminal offence is committed, it is always open to the complainant to file a criminal action as well as a civil case. In support of the said contention, the learned counsel based reliance on a decision of the Apex Court reported in 2000 CRI. L.J. 1487 (1) (M/s. Medchl Chemicals and Pharma Pvt. Ltd., v. M/s. Biological E. Ltd. and others). In the said decision, in paragraph 17, it is laid down as under:-

"17. ... The ingredients of the offences under Sections 415, 418 and 420 cannot be said to be totally absent on the basis of the allegations in the complaint. We however, hasten to add that whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evident to be led at the trial in the complaint case but simply because the fact that there is a remedy provided for breach of contract, that does not by itself clothe the Court to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact "they are not mutually exclusive but clearly co-extensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who co