The mere failure to perform a contractual obligation does not constitute cheating unless fraudulent intent is established at the time of the agreement.

O R D E R

The sole accused in C.C.No.1765/2012 on the files of Judicial First Class Magistrate Court-I, Perumbavoor has filed this petition under Section 482 of the Code of Criminal Procedure to quash the proceedings against him in the said case.

2. The aforesaid case originated on a private complaint filed by the second respondent alleging the commission of offence under Section 420 I.P.C by the petitioner herein, which was forwarded to the police under Section 156(3) Cr.P.C.

The allegation against the petitioner was that in violation of the terms of agreement dated 24.01.2002 with the second respondent for the payment of an amount of Rs.12,51,640/- as the cost of 39 consignments of veneer sent by the second respondent, the petitioner committed cheating by not making payment of the said amount inspite of repeated demands. It is alleged in the complaint that two cheques issued by the petitioner on 12.08.2002 and 16.08.2002 towards payment of the aforesaid liability, were returned by the bank with the endorsement ‘funds expected, please present afterwards’.

It is the further allegation in the complaint that the second respondent did not present the cheque again believing the words of the petitioner, but the petitioner failed to make payment for the goods supplied by the second respondent.

3. In the present petition, the petitioner would contend that the nature of the transaction between the petitioner and the second respondent is of civil nature, and the offence of cheating as envisaged under Section 420 I.P.C is not attracted in the facts and circumstances of the case.

4. The second respondent did not choose to appear or contest the proceedings despite service of notice.

5. Heard the learned counsel for the petitioner and the learned Public Prosecutor representing the first respondent.

6. It is obvious from the original complaint filed by the second respondent as well as from the final report filed by the first respondent that the grievance of the second respondent is regarding the failure on the part of the petitioner to make payment of the amount agreed to be paid as the costs of the consignments of veneer sent by the second respondent from his establishment. Neither the original complaint nor the final report contain the necessary particulars to show that right from the very beginning when the petitioner and the second respondent entered into the agreement on 24.01.2002, the petitioner was having the fraudulent and dishonest intention to avoid payment for the goods agreed to be sent by the second respondent.

On the other hand, it is writ large from the various averments in the complaint that the issue involved is purely a breach of contract.

Annexure-A4 notice produced from the part of the petitioner would go to show that the petitioner was having complaint about the substandard quality of the goods supplied by the second respondent.

The said document further reveals that the petitioner had sent a demand draft of Rs.3,00,000/- against the payment of two cheques dated 12.08.2002 and

16.08.2002 which the second respondent had referred to in paragraph No.5 of the original complaint. Thus, it could be seen from the records of the case that the parties have reciprocal allegations levelled against each other in respect of breach of obligations of the terms of the agreement entered into by them. While the second respondent would allege the failure of the petitioner to make payment for the goods supplied, the petitioner would allege the supply of goods of substandard quality by the second respondent.

At any rate, it is not possible to say that the ingredients of the offence as defined under Section 415 IPC would be attracted in the facts and circumstances of the case.

7. It is well settled that the mere failure to perform a promise on the part of one of the parties to an agreement will not give rise to the offence of cheating as envi