Anil Anand vs Chenab Textile Mills and Another

Mansoor Ahmad Mir, Judge

By the medium of this petition, petitioner has invoked the jurisdiction of this Court in terms of Section 561-A, Code of Criminal Procedure (for

short Cr.P.C) for quashing the cognizance drawn, process issued and proceedings conducted in complaint titled M/s. Chenab Textile Mills,

Kathua v. Sh. Prashant Dingra & Anr., on the grounds taken in the memo of petition.

Notice came to be issued but despite service respondents no. 1 is not present. Accordingly, respondent no.1 is set exparte.

It is alleged that the payment was not made to the petitioner by the accused on some grounds. It is no where averred in the complaint that the

accused have committed the offences punishable under Sections 420/120-B/34 Ranbir Penal Code (for short R.P.C) right from the beginning. All

the ingredients of the offence which constitute the commission of offences u/s 420 R.P.C. must co-exist and mere breach of contract is not enough.

As per the averments contained in the complaint, the payment was stopped. Thus, it cannot be said that the accused were having criminal intentions

right from the beginning, even it cannot be presumed. There is nothing on the file suggesting the fact that the accused have committed the offences

punishable under Sections 420/120-B/34 R.P.C.

To hold a person guilty of cheating, it is necessary to indicate or show that the accused had fraudulent or dishonest intentions from the very

beginning. Merely stopping the payment or failure to make the payment cannot be said that the accused has dishonest intentions from the very

beginning. Apex Court in case titled Vijaya Rao v. State of Rajasthan and anr reported in 2005 (7) SCC 69 has held that if the ingredients do not

constitute the commission of offence u/s 420 R.P.C, the taking of cognizance and issuance of process are abuse of process of the Court. It is apt

to reproduce para 5 of the judgment.

Except using the expressions ""fraudulent misappropriation"" and ""malafide intention"", the allegations in the complaint do not at all disclose as to

how the appellant can be found guilty of the offence u/s 420 IPC. The ingredients constituting Section 420 are conspicuously lacking in the

complaint. All the courts have failed to address themselves to 420 or for that matter any offence u/s 409 has been committed. Even going by the

allegations in the complaint, allowing the criminal proceedings to go on against the appellant, would result in abuse of the process of the court.

Hence, the proceedings in the Complaint Case No. 10 of the Chief Judicial Magistrate, Sikar are quashed as against the appellant. The appeal is

allowed accordingly.

Apex Court also in a case titled Hira Lal Hari Lal Bhagwati Vs. C.B.I., New Delhi, laid down the same principle and held that if accused fails to

keep up the promise subsequently, it cannot be said and held that the accused has committed offence punishable u/s 420 R.P.C. In order to

establish the offence of cheating, the complainant is required to show and indicate that the accused has fraudulent and dishonest intentions at the

time of making the promise or representation. Mere saying is not enough.

In the given circumstances, It is apt to reproduce Para no. 7 & 11 of the complaint:-

That the Complainant presented the documents including receipt of the goods issued by the Accused no. 1 and transport receipt with its banker

Punjab National Bank, Kathua on 06.09.06, which in its turn sent the documents to the Accused no.2 for presentation/negotiation, thus for

payment and collection of price of the goods, but surprisingly, with untenable, flimsy, manipulated, created, fabricated and concocted objections,

put forth by the Accused no.2 of course being part of the conspiracy referred to above interse the Accused, did not make the payment, saying that

the Accused no.1 has not received the goods, by reading the endorsement on receipt of goods, ""Goods not received"", instead of ""Goods has

received"", with another false objection that the Transport Receipt is undated and asked the Banker of the Complainant to remove the above

discrepancies in the documents. Accordingly, the Complainant Banker informed the Complainant, of this plea of the Accused no.2. Photocopy

attested of the Receipt of goods referred herein is attached as Annexure ""R"". Copy of the Letter dated 6.09.2006 is also attached as Annexure

L"".

That the negotiation/presentation period after amendment comes, to be 05.10.06, goods have been admittedly received before 20.09.06, the

documents presented/negotiated, were objected to on flimsy, manipulated, fabricated, untenable and on created grounds when the documents

were/are well in order again reached Accused no.2 'Bank on 28.09.06, for presentation/negotiation, much before 05.10.06, the validity period, the

accused no.2 was/is under obligation to honour the Letter of Credit, Annexure ""LC"" but only with fraudulent, common criminal and dishonest

intention and working under the conspiracy with each other, interse the accused, the payment of the price of the goods supplied, has been refused

to the complainant, which has resulted in unlawful personal gain to the accused persons and unlawful loss to the complainant and that the accused

have been from the very beginning intended to cheat the complainant, which intention from time to time became to force by their illegal, criminal

and dishonest actions causing ultimately unlawful loss to the complainant and unlawful gain to the Accused persons.

The crux of the complaint is that the payment was stopped by the accused without any justification. There is nothing in the complaint to show

that how the accused exercised deception or fraudulently or dishonestly induced the complainant to supply the goods. What is averred in the

complaint is that the goods were supplied but the payment was not made despite of the fact that the Letter of Credit was executed. This complaint

on the face of it is abuse of process of law.

It is apt to mention herein that allegations against both the accused are same and the respondent no.2 filed a petition u/s 561-A Cr.P.C No.

39/2008, which came to be allowed and the complaint, so far it relates to him, was accordingly quashed. Thus, only on this count also, this petition

merits to be allowed.

Viewed thus, this petition is accordingly allowed. The cognizance drawn, process issued and proceedings conducted are quashed.

Consequently, the complaint is dismissed.