The offences of criminal breach of trust and cheating cannot co-exist; enduring violations of contract constitute a breach of trust under Section 406 IPC.

CAV ORDER

The petitioners are before this Court calling in question registration of a crime in Crime No.152 of 2024 registered for offences punishable under Sections 406 , 420, 120B and 34 of the IPC and pending before the 3^rd Additional Chief Metropolitan Magistrate, Bengaluru.

2. Heard Sri Krishna S. Vyas, learned counsel appearing for the petitioner, Sri B.N. Jagadeesha, learned Additional State Public Prosecutor appearing for respondents 1 and 2 and Smt. Sanjana Rao, learned counsel appearing for respondent No.3.

3. Facts, in brief, germane are as follows:-

The 3^rd respondent is the complainant. The complainant works with M/s Ninjacart. Ninjacart operates under a “Bill to Ship” model of business wherein Ninjacart purchases produces from wholesale suppliers which are in turn sold to subsequent buyers. It is averred in the petition that in the course of ordinary trade, Ninjacart makes upfront and complete payment to its wholesale suppliers. Thereafter, when the items are resold to subsequent buyers, payment is accepted by Ninjacart which was given on a credit of 65 – 70 days to the buyers to make good necessary payment. The petitioners and Ninjacart have a business agreement. The petitioners are a partnership firm. Ninjacart enters into an arrangement with Nekkanti for supply of shrimps. In furtherance of the trade, Ninjacart communicated mails from January 2023 to June 2023 offering to supply different quantities of shrimp at the prices mentioned therein. The complainant is said to have entered into sale and purchase agreement dated 20-12-2022 with accused No.1 for availing supply of agricultural goods including shrimp. In terms of the said arrangement or agreement, accused No.1 was required to supply these goods as and when Ninjacart places purchase orders for the same and accused No.1 was required to deliver goods directly to Ninjacart’s customers.

4. The complainant places various orders for supply of shrimp which was required to be delivered to Nekkanti. In turn accused No.2 issued Goods Received Note (‘GRN’) to Ninjacart confirming receipt of shrimp on behalf of Nekkanti. Thereafter, Ninjacart raised various invoices to Nekkanti and these were being cleared from time to time. Likewise, between 23-05-2023 and 30-06-2023 the offers were made to Nekkanti. Accused No.2 accepted these offers on behalf of Nekkanti and Ninjacart contacted accused No.1 for supply of shrimp. After a few days Nekkanti through accused No.2 issued GRN in the form of mail confirming quantity of shrimps. Ninjacart from its coffers releases payment of ₹9,35,96,343/- to accused No.1 after deducting TDS. The complainant thus fulfilled all the obligations. But, accused No.1 refused to pay the amount that was to be paid to the complainant. Projecting it to be a criminal breach of trust or cheating, the complaint comes to be registered by the complainant which becomes a crime in crime No.152 of 2024 pursuant to which, the accounts of the petitioners are frozen. Aggrieved by registration of crime and freezement of accounts, the petitioners are before the doors of this Court in the subject petition.

5. The learned counsel appearing for the petitioners would vehemently contend that the issue in the lis is a pure breach of agreement, if at all it is, and what is called in question is an alleged loss caused on account of acts of the petitioners. Therefore, it is a case of recovery of money. It is his further contention that the incident happens between 23-05-2023 and 30-06-2023 but the crime is registered on 02-04-2024, 9 months thereafter. He would submit that there is gross delay in registering the crime which would vitiate the entire crime and seeks qua