Searching Case Laws & Precedent on Legal Query..!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query..!
Scanned Judgements…!
References:- ["STATE BANK OF INDIA VS PALLABH BHOWMICK S/O LATE P. R. BHOWMICK - Gauhati"]- ["HDFC Bank Ltd. VS Anurag Gupta - Consumer"]- ["Ms. Shirley Mathew Resolution Professional of Maylari Agro Products Limited vs Shri. Mahesh Former Director of Maylari Agro Products Limited - National Company Law Tribunal"]- ["Andhra bank VS Project Master Electricals Pvt Ltd - National Company Law Tribunal"]- ["Dhiraj Kumar Sarkar VS Debabrata Das - Gauhati"]- ["INDNCLT00000063697"]
In the world of business transactions, advancing funds on behalf of a company—often called a Corporate Debtor (CD)—is common. But what happens when no goods or services are received in return? Can this be classified as a fraudulent transaction? This question arises frequently in commercial disputes: Find judgments saying that if an amount is advanced on behalf of the CD and no goods or service is received in return then it can be a fraudulent transaction.
Indian courts have addressed similar scenarios, emphasizing misuse of funds, misappropriation, and the need for contractual fulfillment. While not every unpaid advance is fraudulent, certain cases highlight when it crosses into wrongful territory. This post analyzes key judgments, principles, and exceptions to guide businesses and investors. Note: This is general information, not legal advice. Consult a qualified lawyer for specific cases.
Courts typically examine intent, benefit to the recipient, and failure to deliver promised consideration. Advances where the recipient (e.g., company or CD) benefits without providing goods/services may constitute misappropriation or fraud, especially if funds are misused. Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505
In a pivotal ruling under the Arbitration and Conciliation Act, 1996 (Section 9), an investor infused USD 1 million for equity shares but received none. The company used the funds to discharge its obligations without issuing shares. The court found prima facie evidence of misappropriation and granted interim relief: deposit of funds and prohibition on property alienation. Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505
Timeline of Events:- Investor invests USD 1 million for shares.- Company discharges debts without issuing shares.- Court recognizes misuse as fraudulent-like activity.- Protective measures imposed pending arbitration.
This establishes that misuse of invested funds without fulfilling contractual obligations constitutes misappropriation or a form of fraud.Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505
Another case under the Consumer Protection Act, 1986 (Sections 2 & 14) involved an insurance settlement for damaged goods. The court held that once a person receives a full and final settlement of their claim, they cannot contend that further amounts are due.Overseas Trading VS National Insurance Co. Ltd. - Consumer (1995)
Analogously, if advances are made and the recipient enjoys benefits without delivery, the transaction may be settled or deemed wrongful if reopened fraudulently.
Other rulings provide nuance, showing when advances without returns are not automatically fraudulent.
In insolvency contexts, payments like Rs. 74,20,000/- made by a respondent on behalf of the CD to a third party (Rajmal Gorecha & Sons) were scrutinized. The total received was Rs. 1,78,11,834, but courts assessed if such advances warranted repayment absent goods/services. This underscores evidentiary needs for claiming fraud. Mr. Anuj Bajpai VS Surendra Lodha (suspended Director of Corporate Debtor) - 2023 Supreme(Online)(NCLT) 2062
A criminal case under IPC Sections 406, 420, 120B clarified: If subsequent payment has not been made, that will not tantamount to deception, fraudulent or dishonest inducement nor would it amount to deception by intentional means right from the beginning of the transaction.Gannon Dunkerley & Company Limited VS Chhatishgarh Impex Private Limited - 2024 Supreme(Cal) 1141
The court quashed summons, holding mere non-payment in a commercial transaction does not equate to criminal liability and stressed distinguishing civil disputes from crimes. This limits fraud claims to cases with proven initial deceit.
Consumer forums have ruled on deficiencies enabling fraud. In a demat account case, failure to scrutinize address changes facilitated share fraud. The court awarded Rs. 1,00,000 compensation, noting deficiency in service in not appropriately scrutinizing the documents... facilitating fraud.Rupal R. Patel VS Integrated Enterprises (India) Ltd.
Similarly, sham transfers during injunctions are void: Transfers made during an injunction are void; claimants must prove bona fides.V. Jyothi, W/O M. K. Vasavan VS Sathyabhama, W/O M. K. Raveendran - 2024 Supreme(Ker) 1531
ATM fraud cases highlight bank responsibilities, but if there was fraudulent withdrawal with the help of debit card and PIN etc., there was no deficiency in service on the part of the Bank.ICICI BANK LTD. & ANR. vs KARAM SINGH & ANR. - 2017 Supreme(Online)(NCDRC) 1167
Courts wield powers under Section 9 for protection, but full settlements bar further claims. Overseas Trading VS National Insurance Co. Ltd. - Consumer (1995)
Not all cases qualify:- Genuine Disputes: Commercial disagreements without criminal intent are civil. Gannon Dunkerley & Company Limited VS Chhatishgarh Impex Private Limited - 2024 Supreme(Cal) 1141- Evidentiary Burden: Prove benefit without obligation fulfillment; no evidence means no fraud. Registrar of Births and Deaths VS Pathrose - 2007 Supreme(Ker) 852 (No proof of fraudulent entry in records.)- Bona Fide Claims: Transferees must show good faith. V. Jyothi, W/O M. K. Vasavan VS Sathyabhama, W/O M. K. Raveendran - 2024 Supreme(Ker) 1531- Settled Transactions: Full benefit received precludes reopening. Overseas Trading VS National Insurance Co. Ltd. - Consumer (1995)
To mitigate risks:- Document Thoroughly: Verify goods/services before advances.- Contractual Safeguards: Specify non-performance consequences, repayment triggers.- Seek Interim Relief: Approach courts under Section 9 for suspected misuse. Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505- Evidence Collection: Maintain records of non-delivery to prove intent.
Indian jurisprudence, through cases like Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505 and Overseas Trading VS National Insurance Co. Ltd. - Consumer (1995), indicates advances on behalf of a CD without goods/services may be fraudulent if misuse or misappropriation is evident. However, courts demand proof of intent, distinguishing from mere breaches. Gannon Dunkerley & Company Limited VS Chhatishgarh Impex Private Limited - 2024 Supreme(Cal) 1141
Key Takeaways:- Misuse without delivery often triggers relief.- Full settlements close doors to further fraud claims.- Always prioritize documentation and legal recourse.
Stay vigilant in transactions—fraud labels carry serious implications. For tailored advice, engage legal experts.
References:- Manmohan Kapani vs Kapani Resorts Pvt. Ltd. - 2025 0 Supreme(Bom) 505 (Arbitration Act, Section 9)- Overseas Trading VS National Insurance Co. Ltd. - Consumer (1995) (Consumer Protection Act)- Mr. Anuj Bajpai VS Surendra Lodha (suspended Director of Corporate Debtor) - 2023 Supreme(Online)(NCLT) 2062, Gannon Dunkerley & Company Limited VS Chhatishgarh Impex Private Limited - 2024 Supreme(Cal) 1141, Rupal R. Patel VS Integrated Enterprises (India) Ltd., V. Jyothi, W/O M. K. Vasavan VS Sathyabhama, W/O M. K. Raveendran - 2024 Supreme(Ker) 1531, ICICI BANK LTD. & ANR. vs KARAM SINGH & ANR. - 2017 Supreme(Online)(NCDRC) 1167
#FraudulentTransactions #IndianLaw #BusinessFraud
received the phone call of the petitioner portraying himself to be a representative of the respondent No. 3 and had undertaken to return the cost of the garment amounting to Rs. 4000/- as is reflected from the transaction dated 18.10.2021 in the statement of account bearing No. 77770101374417 of the ... On a reading of the above clauses, it can be inferred that in case of un-authorized electronic transactions the Bank would have a duty to reverse the payment and credit the amount involved in the un-authorized t....
In reply, the OP Bank contended that they did not find any record of the alleged warrant being deposited in their bank, hence the question of crediting the amount to the Complainant’s account did not arise. ... Anurag Gupta This is to confirm that it is a general practice in USA, not to return fraudulent items back to the depositor. Please feel free to contact me should you need any details. ... As a result, funds were not received by the OP Bank to be credited into his account. Clearly, OP Bank i....
The Corporate Debtor paid an amount of Rs 30,80,930/- to the Respondent No.1 towards repayment of an unsecured loan advanced by the Respondent No.1 to the Corporate Debtor. b. ... By no stretch of imagination such a transaction can be covered within the scope of an ambit of “fraudulent transaction”. 17. ... The RP has identified an amount of Rs.24,25,26,509/- under the head of ‘Sundry Debtors’ shown in the books of accounts as being covered as ‘fraudulent transactions....
The Respondent No.2 paid an amount of Rs. 74,20,000/- to Rajmal on behalf of the corporate debtor. ... The amount paid by the Respondent No.2 on behalf of corporate debtor at aforementioned occasions warranted payments to be made to it. ... of CD (Details as mentioned in the above point)Rs. 52,91,834Payment made by Respondent no.2 on behalf of CD to Rajmal Gorecha & SonsRs. 74,20,000Total Amount ReceivedRs. 1,78,11,834Total payment to respondent no.2 by ... A summary ....
If subsequent payment has not been made, that will not tantamount to deception, fraudulent or dishonest inducement nor would it amount to deception by intentional means right from the beginning of the transaction. ... Deception by fraudulent or dishonest inducement must be shown to exist right from the beginning of the transaction”. ... Learned counsel appearing on behalf of the petitioners submitted that whatsoever transactions had been made between the petitioner company and the oppo....
As alleged by the complainant, an amount of Rs. 18,62,904/- was received by the petitioner on behalf of the accused No. 2 towards supply of goods but no supply was made in respect of the said payment. ... Return the LCR. ... From the above statement, made by the complainant himself, it is clear that whatever amount was received by the petitioner was remitted to the supplier i.e. accused No. 2 and no amount was retained by him. ... the said amount. .....
As far as third transaction in respect of return of the Mercedes Car is concerned, the Applicant has not placed on record any material to support its claim and the forensic auditor has not impugned this transaction in the report. ... As far as transaction number (i) is concerned, it is observed that the Respondent No. 5 has exported the goods on behalf of the Corporate Debtor. The said goods were confiscated by the customs department as the goods were old and used. ... Pass an order and declare that sal....
She has asserted that after getting the amount from the fraudulent transaction of sale of her shares from the concerned Court the opponents ought to have consulted the complainant whether she would prefer to have the money from her sold shares or the shares. ... We have also gone through the decision submitted on behalf of her. No one has remained present on behalf of the opponents. ... The complainant has under such circumstances alleged that the fraudulent transfer of her shares had ....
Sometimes, even after the said amount is debited, the machine may not eject the money, although transaction may appear successful. ... Against each transaction, the machine provides a slip to the drawee account holder to see about his transaction. ... Alleging deficiency of service,, he filed this complaint seeking refund of his illegal withdrawals amount Rs.17,950.60ps. with Rs.50,000/- compensation for mental agony, and Rs.25,000/- compensation of deficiency of serv....
In case some fraudulent withdrawal of any amount had taken place, the complainants were responsible for the same. There was no deficiency in service on the part of the Bank, vis-à-vis, the complainants. The consumer complaint, therefore, deserved to be dismissed. 4. ... It was held in this order that there was no deficiency in service on the part of the Bank, if there was fraudulent withdrawal with the help of debit card and PIN etc. 6. ... They used to receive messages on their phone, as....
[(2017) SCC OnLine Kerala 1028], a Division Bench of this Court held that once it is proved or an inference can be drawn that it is a fraudulent transfer under Section 53 of the Act, then the burden is heavy on the objector to prove that he is a bonafide purchaser for valid consideration in good faith. This has to be established by the objector/claimant, and if they fail to discharge the same, then they will lose their claim. 12. In the above admitted facts, going by the principles of law stated above, it is for the claimant to prove that she is a bonafide transferee for va....
It is, in substance, one transaction of sale of software and once it is accepted that the software put in the CD is “goods”, then there cannot be any separate service element in the transaction. It amounts to “deemed sale” which would not attract service tax. We are of the view that the artificial segregation of the transaction, as in the case on hand, into two parts is not tenable in law. We are saying so because even otherwise the user is put in possession and full control of the software.
This sale is challenged on all such grounds that it is a sham transaction and the document is the outcome of fraud and as such the transaction is a fraudulent one. Besides, it has been pleaded that Kumudini was never in need of money for selling the suit land and she had never delivered the possession of the suit land pursuant to the said sale to the Plaintiff. The transaction which is projected as the foundation of the claim of the Plaintiff is stated to be void and inoperative and it is said that the Plaintiff has not derived any title by virtue of the same. He disputes t....
An alternative submission was advanced on behalf of the Assessee in the context of the second transaction that, if the said transaction was a financial arrangement, as held by the department, even then the Assessee could be taxed only on interest embedded in the amount of lease rentals received from the lessee, M/s A. In this connection, it was submitted that the Assessee had earned total income of ` 6,33,596 over a period of 36 months commencing from 15-3-1991 to 14-3-1994. Therefore, the matter should be remitted for recalculation.
Nobody has adduced any evidence to prove that respondents 1 and 2 had made any fraudulent entry; nor were they instrumental in making any fraudulent or improper entry. Only if an entry is made in the register deceptively or improperly then only it can be taken as a fraudulent entry or wrong entry. There is no material in this case to show that respondents 1 and 2 had made any fraudulent or improper entry in the register of births and deaths.
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