AI Structured Summary
Not yet generated for this judgment
Judgment
Ratnavel Pandian, J.—Accused 1, 3 and 4 in C.C. 57 of 1975 on the file of the Chief Judicial Magistrate, Madurai, have filed this petition
requesting this Court to invoke its extra-ordinary powers u/s 482 Cr. P.C., and to quash the charges framed against them in the abovesaid case.
In the petition filed by them its(sic) is averred that a private complaint u/s 420, I.P.C., was filed by the first Respondent herein (complainant)
against (1) one K. Gupta Flour and Oil Industries, represented by Ramakaran Das Gupta, Akola, and (2) Shri Krishna Sharma Oil Mills,
represented by the first Petitioner herein Ratanlal Sharma, Akola, before the Chief Judicial Magistrate, Madurai, alleging as follows: Both the
accused are doing business at Akola, Maharashtra and are having business dealings with the complainant and in that capacity, the said Ramakaran
Das Gupta sent a representative, one Madanlal Sharma, to the Complainant, requesting him to purchase 2750 bags of Uganda Cotton seeds and
despatch the same by rail against his permits to Akola. Though the permits were not sent, the representative Madanlal insisted upon the purchase
and accordingly the first Respondent herein purchased the quantity and stored the same at Theni in Madurai district and at Rajapalayam,
Ramanathapuram district. This was in August, 1974. Thereupon, on further orders in September 1974, the complainant purchased 100 bags of the
said variety and stored them in his godown at Madurai. The permits were received from the said Ramakaran Das Gupta in October, 1974 by the
first, Respondent for about 1250 bags. Meanwhile, the first Petitioner herein (Ratanlal Sharma) placed orders for 15 wagons of the same variety to
be despatched and also sent the permits. The goods were despatched to the first Petitioner from Trichy and Salt Cotaurs as wagons from Madurai
were not available. When the said goods arrived at Akola, the first Petitioner refused to take delivery of the goods due to the fall in the prices of
cotton seeds. Hence, the first Respondent went over to Akola to settle the matters. In spite of repeated demands made by the first Respondent,
the first Petitioner refused to take delivery of the goods when consigned. In order to avoid loss and demurrage, Ramakaran Das Gupta was
requested by the first Respondent to take delivery of the cotton seeds which were consigned to the first Petitioner, which request Ramakaran Das
Gupta refused to comply with, in collusion with the first Petitioner, and imposed a condition on the first Respondent that unless the latter gave a
letter in writing that all prior contracts to both of them stood cancelled and the first Respondent would not take any action against the first
Petitioner, Ramakaran Das Gupta would not take the goods. As the first Respondent bad no other alternative to agree to the conditions imposed
by Ramakaran Das Gupta, the first Respondent, under duress and coercion ,wrote a letter dated 26th October 1974 as per the conditions
imposed by Ramakaran Das Gupta. On receiving the letter. Ramakaran Das Gupta purchased the cotton seeds at the prevailing market rate which
was considerably lower than the contract prices. Thus, the first Respondent sustained a considerable wrongful loss in the abovesaid transaction.
Thereupon, the first Respondent sold the goods to Das Gupta sent on behalf of the first Petitioner treating it as a separate transaction over and
above the goods lying at Madurai, purchased on behalf of Das Gupta, and not instead, on the goods purchased on behalf of the said Das Gupta,
which were lying in the first Respondent''s godown. Thus, he would complain that the first Respondent who was acting on the dishonest and
fraudulent representations made by the two persons mentioned in the complaint, had to purchase the Uganda cotton seeds in large quantities at the
then prevailing prices and as a result of the unlawful and deliberate refusal of the said accused to take delivery of the same, was put not only to
considerable loss monetarily but also had to suffer mental agony as well. Thus the accused had acted in collusion with each other and had
deliberately cheated the complainant and committed offences punishable u/s 420 I.P.C. Mr. C. K. Venkatanarasimhan, appearing for the
Petitioners, would submit that the Magistrate, after receipt of this complaint, ordered for an enquiry and report u/s 156, Crl. P.C. Respondent No.
2, after registering a case and investigating the same, filed a charge-sheet against five accused mentioned therein, viz., Petitioners 1 to 3 herein
(accused 1,3 and 4 in the charge-sheet); Ramakaran Das Gupta (accused-2 in the complaint presented in Court) and one Madanlal Sharma (5th
accused in the charge-sheet)... Thereupon, the learned Chief Judicial Magistrate, on a perusal of the documents discharged accused 2 and 3
mentioned in the charge-sheet, but framed charges against these Petitioners, for an offence under Sections 420 and 384, I.P.C. Hence, this petition
for quashing the proceedings.
Mr. C.K. Venkatanarasimhan, appearing for the Petitioners, would submit that the non-taking of delivery of the goods and the execution of the
letter were both at Akola in Maharashtra State, and hence, the lower; Court has no jurisdiction to frame the charges. Secondly, he would contend
that even assuming the entire facts to be true, it is very apparent that they do not constitute any criminal offence .Thirdly, according to him, the
correspondence that passed between the parties would show that there was neither any threat nor any coercion exerted on the complainant to
execute the letter dated 26th October, 1974 as alleged in the complaint. Finally, he would submit that the whole proceedings are an abuse of
process of the criminal Court, intended to put the Petitioners who are traders at Akola, to hardships and damages.
The Petitioners filed a typed set of papers containing copies of letters and correspondence alleged to have passed between them, another set of
which was furnished to the Respondents. Though Mr. Seetharaman, learned Counsel appearing for the first Respondent, does not raise any
objection to these papers, I am not inclined to act upon them at this stage without legal proof. Moreover, I am not going into the question of the
jurisdiction of the Court on the issue as to whether the offence was committed at Akola, Maharashtra State, or at Madurai where the first
Petitioner is said to have collected the materials and transported the same. The main question for my consideration, even admitting the entire
averments in the complaint to be true, is whether they would constitute any criminal offence.
Section 415, I.P.C., defines what is cheating. To constitute an offence of cheating under this section, the following ingredient are to be proved.
They are:(1) deception of any person, and thereby (2) (a) fraudulently or dishonestly inducing that person (i) to deliver any property to any person,
or (ii) to consent that any person shall retain any property; or (b) intentionally inducing the person deceived to do or omit to do anything which he
would not do or omit if he were not so deceived land which act or emission causes, or is likely to cause damage or harm to that person in body,
mind, reputation or property. Intention(sic) can only be gathered from the surrounding circumstances. The term ""deceiving"" is not defined in the
section. Deception is an essential ingredient of an offence of cheating. A person Is said to have been deceived when it is proved that he was
induced to believe as true which was untrue. The evidence must establish the existence of a fraudulent or dishonest intention at the time of the
commission of the act in respect of which the cheating is alleged. Therefore, the question, whether there was intention to deceive, must be
answered at the date when the contract was made. If the accused had. at the time when he induced the complainant to part with the goods,
promised to pay cash against delivery, then the fact that he did not pay would not by itself convert the transaction into one of cheating, if the
accused had intention to do so. But, it must be shown that be had no intention whatsoever to pay but merely said that he would do so in order to
induce the complainant to part with the goods. Only in that contingency, a case of cheating would be established.
Mere breach of contract, as I find in the instant case, cannot give rise to a criminal prosecution The distinction between a case of mere breach of
contract and one of cheating depends upon the intention of the accused at the time of the alleged inducement which, of course, may be adjudged
by the subsequent conduct. Coming to the actual crux of the case, the complaint reads as follows;
When the goods reached Akola, the second accused (1st accused-1st Petitioner herein) refused to take delivery of the goods due to the fall in the
price of cotton seeds.
The above allegation would by itself prove that at the time when the goods were consigned from this State to the first Petitioner, the first Petitioner
did not have any intention to induce the complainant to part with the goods, and the refusal to take delivery of the goods it due only to the fall of the
price of cotton seeds. Under these circumstances, I hold that the refusal on the part of the first Petitioner to take delivery of the goods is due to the
intervening circumstance that arose between the time of the placing of the order and the refusal to take delivery of the goods, viz., the fluctuation in
price, and therefore, it is not possible to infer from the circumstances alleged, that any deception has been practised by the Petitioners.
Mr. C.K. Venkatanarasimhan, at this stage, would bring to my notice two decisions viz., P.M. Natarajan v. K.G. Gupta 1975 Cri. L.J. 298
(sic) and Hari Prasad Chamaria Vs. Bishun Kumar Surekha and Others, The facts in the former case are very similar to those in the present case.
In that case, the application was filed u/s 561-A, Cr.P.C., for quashing the proceedings pending in the Court of the Munsif-Magistrate, on the
basis of a complaint, for an offence u/s 417,I.P.C. The complaint therein had been filed on the allegations that the accused, who was a merchant
and commission agent, placed an order with the complainant for purchase of 220 quintals of Pea pulse, and for despatching the same to the
accused at Palghat: that the complainant quoted the price and after its having been accepted by the accused, purchased the goods and despatched
them through the railway; that hundies and railway receipts were sent through Bank, to be delivered to the accused on payment of the price of the
goods: that the accused did not honour the hundies and take delivery of the goods, in spite of the efforts made by the complainant, and that as in
the meantime the market had gone down, the complainant suffered a loss to the extent of Rs. 1,500/-. On those allegations, the accused was
charged with having committed an offence u/s 417,I.P.C. It was contended for the complainant that as the accused had ultimately refused to take
delivery of the goods and honour the goods, it must be inferred that from the very beginning he bad the intention of not honouring the hundies and
not taking the delivery of the goods. On the above facts, it was observed as follows:
It may have been possible to draw such an inference from the conduct of the accused, if nothing had intervened. If the circumstances continue
unaltered from the beginning till the end i.e., the status quo ante continues till the final act for omission by the accused, it may be possible to draw
such an inference; but if the circumstances change and something intervenes in between the placing of the order and refusing to take the delivery of
goods, it will not be possible to draw any such inference. In the complaint it has been stated that in the meantime the market bad gone down. If the
accused had taken delivery of the goods at the rate contracted the accused would have suffered a loss. It was this which could, and probably did,
induce him to change-his mind As this is a new factor which came into existence after the placing of the order and before the tender of the goods,
the inference sought to be drawn by the learned Counsel cannot be drawn.
In the latter case, the facts were that the Appellant therein filed a complaint against the two Respondents on the allegation that the Appellant was
running business at Samastipur in Bihar and Calcutta; the Respondents were known to the Appellant and he had full faith in them; the Appellant
wanted to start some business and in that connection talked to the Respondents, who then stated that they would start transport business and they
also further stated that the Appellant would be the proprietor of the Corporation (business) and the Respondents would work as his agents, the
Appellant paid Rs. 35.000/- to the Respondents, and later when he went to Calcutta he found that the Respondents were doing transport business
but the Appellant was net shown as the proprietor of that business; when remonstrated, they said they would get the Corporation registered and
show the Appellant as the proprietor and also agreed to settle the business accounts in December every year; despite the above commitment, they
failed to render accounts and even afterwards despite the demands of the Appellant, they failed to do so, and then the complaint was filed u/s 420,
I P C, the Respondents approached the High Court u/s 561-A, Code of Criminal Procedure On the above facts, the High Court was of the view
that mere breach of contract could not give rise to criminal prosecution, and the Appellant had a remedy in the civil Court. The observations made
by the Supreme Court therein while confirming the judgment of the High Court, would be relevant:
For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the
Appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of
the Respondents u/s 420, I.P.C. There is nothing in the complaint to show that the Respondents had dishonest or fraudulent intention at the time
the Appellant parted with Rs. 85.000/-. There is also nothing to indicate that the Respondents Induced the Appellant to pay them Rs. 35,000/- by
deceiving him. It is further not the case of the Appellant that a representation was made by the Respondents to him at or before the time he paid
the money to them and that at the time the representation was made, the Respondents knew the tame to be false. The fact that the Respondents
subsequently did not abide by their commitment that they would skew the appellant to be the propertier.....and would also render accounts to him
in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the Respondents for
the offence of cheating .
In view of the observations made in the above two decisions, I am of the view that there it nothing in the complaint in the instant case to show that
the Petitioner had the dishonest or fraudulent intention at the time the first Respondent parted with the goods, nor did the complaint indicate that the
Petitioners had induced the first Respondent to part with them. The mere fact that the Petitioners did not abide by their commitment as to the
placing of the order for the goods would not fasten them with criminal liability.
The next charge for the offence u/s 384, I.P C. is only ore incidental to the main offence u/s 420. When the main offence goes, this charge also
has to fail.
Mr. Seetharaman, appearing for the first Respondent, has not placed any material before me for sustaining these charges. The learned Public
Prosecutor, appearing for the State-the second Respondent, would also fairly concede that the materials placed before the Court are not sufficient
to sustain any of the charges.
Under these circumstances, I have no other option but to quash the proceedings by invoking the inherent power of this Court u/s 482, Crl.P.C.
The petition is accordingly allowed and the impugned proceedings and the charges, framed are quashed.