The main legal point established in the judgment is that criminal proceedings should not be initiated as a means to resolve civil disputes, and the elements of fraud and cheating under the Indian Penal Code must be carefully evaluated in the context of contractual disputes.

AJIT KUMAR, J.

1. Heard learned counsel for the parties.

2. By means of this petition under Article 227 of the Constitution of India, the petitioners have assailed the order dated 16th April, 2009 passed by the Additional Sessions Judge, Room No.17, Agra in Revision No.- 50 of 2009 and the order dated 24th December, 2008 passed by the Judicial Magistrate-I, Room No.-1, Agra dismissing the protest petition of the petitioners and accepting the final report submitted by the police under Section 173 (2) of the Code of Criminal Procedure, 1973 in respect of Sections 420, 467, 468 and 478 of Indian Penal Code complained of.

3. Briefly stated the facts of the case are that the petitioners and the respondent- Hindustan Petroleum Corporation Ltd. entered into an agreement for production of LPG cylinders to the corporation on 15th June, 1982. As per the terms and conditions of the agreement for the purposes of production and manufacture of cylinders the corporation was to supply necessary raw materials in terms of steel to meet the requirements of the production. In all 54,000 cylinders were produced and delivered between July, 1982 to March, 1983. However, in spite of necessary supply of raw materials, necessary number of cylinders could not be supplied as per the original schedule and so the corporation decided to further extend the period vide change order dated 07.09.1983, However, even by the extended period supply could not be made by the applicant and resultantly arbitration proceedings were drawn as per the terms and conditions of the agreement at the end of the Hindustan Petroleum Corporation Ltd. by means of Arbitration Suit No.1391 of 1985 instituted in the Bombay High Court. The Bombay High Court entertained the arbitration case and appointed the arbitrator but before the arbitrator could enter into the reference to adjudicate the issues between the parties arising out of the discord over compliance of the terms and conditions of the agreement, the parties entered into inter se agreement on 23rd July, 1986 in the arbitration proceeding itself and as per the revised terms reached between the parties, it was agreed by the petitioners that they shall make requisite supply of cylinders and shall bear the cost of shortage and damages. It was further agreed that beyond the period of 90 days of the agreement, the corporation-plaintiff, opposite parties herein, shall not be bound to took delivery of cylinders. The said interim consent, the agreement so titled, was accepted by the Bombay High Court in the arbitration case and the suit stood disposed of in terms of interim consent vide order dated 27th October, 1988.

4. It is admitted in the writ petition that the petitioners could not make further supply of cylinders though agreed in terms of interim consent. According to the corporation such a situation led/forced it to forfeit the security amount.

5. The petitioners under the above circumstances took recourse to the criminal prosecution by lodging first information report through the application under Section 156 (3) of the Code of Criminal Procedure, 1973, in which the police submitted the final report. The petitioners filed the protest petition, however, final report was accepted by the learned Magistrate and the protest petition was dismissed vide impugned order dated 24th December, 2008. The revision petition filed against the said order by the petitioners also came to be dismissed vide order dated 16th April, 2009 and hence, this writ petition challenging both the above orders.

6. The grounds raised by the petitioners is that Indian Standard Institute denied to certify the cylinders and resultantly the respondents did not accept the supply and without informing the petitioners and without understanding the problems which were beyond the control of the petitioners for feature of the security amount was not only wholly illegal but a fraud and clear case of cheating, an act punishable under the Indian Penal Code, 1868.

7. The