(Petition u/S 482 of the Cr.P.C.)
1. This petition under Section 482 of the Code of Criminal Procedure 1973 (hereinafter referred to as "the Code") has been filed by the petitioners for quashing Criminal Case No.1618/02 instituted upon complaint filed by the respondent, alleging commission of offence under Section 420 read with Section 34 of the IPC against the petitioners.
2. Relevant and brief facts giving rise to this petition are that the respondent/complainant had placed order for supply of Hydraulic Pipe Bending Machine with the petitioners. Dispute arose between the parties with regard to supply of the ordered machine. This led to filing of a criminal complaint by the respondent on 4.6.1996 against the petitioners in the Court of Judicial Magistrate 1st Class Raipur. The complainant alleged commission of offence under Section 420 read with Section 34 of the IPC. In support of complaint, complainant examined Shankar Gupta and Vipin Chandra Kothari, whose preliminary statements were recorded by the Magistrate. Considering the complaint and the preliminary statements, Magistrate found that a prima facie case of commission of offence under Section 420 read with Section 34 is made out, whereupon, cognizance was taken and summons were directed to be issued vide order dated 9.5.1997. The petitioners moved application on 6.8.1997 for dismissal of the complaint, which application was rejected on 23.7.2002 by the learned Magistrate. Thereafter, the petitioners approached this Court by filing instant petition for quashing criminal proceedings instituted upon complaint.
3. Learned counsel for the petitioners contended that the entire proceedings instituted upon complaint are gross abuse of the process of law, as the complaint has sought to convert a pure civil dispute, arising out of alleged breach of contract, into a criminal case of cheating. Learned counsel for the petitioners submitted that even if the complaint along with preliminary statements of complainant witnesses and established circumstances are taken as it is and accepted in its entirety, ingredients of cheating are not made out and on the contrary, complaint taken as a whole, only makes out a case of breach of contract. He further submits that in fact, the complainant has also taken recourse to civil remedy by filing civil suit which has been instituted on 14.5.1998, registered as Civil Suit No.15-B/01 and decreed in favour of the complainant, vide judgment and decree dated 8.4.2003, wherein, the Court has decreed an amount of Rs.70,000/- along with interest against the petitioners and in favour of the complainant. Learned counsel for the petitioners urged that in the complaint, there is nothing to show that there was an intention to cheat at the very inception when the advance was paid and orders were placed for supply of Hydraulic Pipe Bending Machine. In his submission, disputes arose between the parties and while the case of the petitioners has been that full advance amount was not paid, respondent blamed that the machine was not manufactured and supplied within the time stipulated and when machines was manufactured and thereafter inspected by the complainant, it was not found as per their specification, which led to dispute. It is urged that these facts, stated in the complaint, taken in its totality and accepted as it is, only establish that the machine was not found as per the specification and the complainant was not satisfied with the manufactured items, therefore, at the most it could be a case of breach of contract and in respect of which, a decree has already been passed in favour of the complainant. In support of his contention, learned counsel for the petitioners relied upon the decisions of Supreme Court in the cases of Ram Jas Vs. State of U.P., State of Kerala Vs. A. Pareed Pillai and another, Anil Kumar Bose Vs. State of Bihar, G. Sagar Suri and another Vs. State of U.P. and Ors., Hridaya Ranjan Prasad Verma and Ors. Vs. State of Bihar and another, Murari Lal Gupta Vs. Gopi Singh, V.P. Shrivastava Vs. Indian Explosives Ltd. And Ors., Geeta Vs. State of U.P. and another, M/s. Indian Oil Corporation Vs. M/s. NEPC India Ltd. and Ors., Harshendra Kumar D. Vs. Rebatilata Koley and Ors.
4. On the other hand, learned counsel for the respondent vehemently submitted that the petitioners had no intention of supplying machine right from the beginning and they made fraudulent misrepresentation to supply machine, induced by which, the complainant placed order for supply and paid huge amount of Rs.70,000/- in two installments as advance. Even after having received the full amount of advance, the petitioners, on one pretext or the other, did not supply the machine and when the notice was given on 9th August, 1995, the petitioners, in their letter dated 14/16th August, 1995, falsely and with intention to defraud and cheat, replied that there was no order placed by the complainant, which prima facie discloses an intention to cheat from the beginning. He further submits that though the machines were to be supplied in 9-10 weeks w.e.f. 31st January, 1995, there was no whisper with regard to manufacturing of machine or any steps taken towards manufacturing of the machine and when complainant's attorney visited factory premises on 14.11.1995, the machine was not ready nor the accused persons were present and in spite of number of offers for inspection and trial of machine by the accused, no inspection of successful trial was given. Therefore, accused very well knew from very inception that they would not be able to deliver the machine as per specification and requirement of the complainant or as per their own assurances, yet they fraudulently obtained an advance of Rs.70,000/-. The assurances given were false to their knowledge and, therefore, case of cheating is made out. He further submits that averments made in the complaint have been supported by the preliminary statements, which prima facie make out a case. Learned counsel for the respondent further submitted that merely because the dispute between the parties has also given rise to a civil cause of action, that could not be made a basis to challenge the maintainability of criminal proceedings, if prima facie the complaint makes out a case of commission of offence alleged in the complaint. In support of his contentions, learned counsel for the respondent relied upon the decisions in the cases of Indian Oil Corpn. (supra), Lalmuni Devi (SMT) Vs. State of Bihar and Ors. and Ravindra Kumar Madhanlal Goenka and another Vs. Rugmini Ram Raghav Spinners Private Ltd.
5. I have heard learned counsel for the parties and perused the records.
6. The scope and ambit of the power of High Court under Section 482 of the Code came up for consideration by the Supreme Court in the case of R.P. Kapur Vs. State of Punjab, wherein categories of cases, where inherent power can and should be exercised to quash the proceedings, were summarized as below:
"(i) Where it manifestly appears that there is a legal bar against the institution or continuance of the criminal proceeding in respect of the offence alleged.
(ii) Where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged.
(iii) Where the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly fails to prove the charge."
7. The aforesaid principles were again reiterated elaborately and comprehensively in well-known decision of the Supreme Court in the case of State of Haryana and Ors. Vs. Bhajan Lal and Ors., wherein the Supreme Court stated categories of cases by way of illustration wherein extraordinary power under Article 226 of the Constitution of India or the inherent powers under Section 482 of the Code could be exercised either to prevent abuse of the process of the Court or otherwise to secure the ends of justice, as below:
"102. ...
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
8. The amplitude of the power and the guiding principles for exercise of such power as laid down in the aforesaid decision have been subsequently reiterated in the plethora of decisions of the Supreme Court, some of them are- 2000 (2) SCC 636 (G. Sagar Suri and another Vs. State of U.P. and Ors.), 2000 (8) SCC 590 (Roy V.D. Vs. State of Kerala), 2005 (1) SCC 122 (M/s Zandu Pharmaceutical Works Ltd. and Ors.Vs. MD Sharaful Haque and Anr.), 2006 (6) SCC 736 : 2006 AIR SCW 3830 (M/s Indian Oil Corporation Vs. M/s NEPC India Ltd., and Ors. ) and so on.
9. The contentions made by learned counsel for the parties, therefore, are required to be examined in the light of principles which have been stated and re-stated in the aforesaid decisions, in order to find out whether a case for quashing criminal proceedings constituted upon complaint is made out so as to warrant interference by this Court, invoking power under Section 482 of the Code.
10. To appreciate the submissions advanced by learned counsel for the petitioners, the provision contained in Sections 415 and 420 of the IPC are required to be looked into.
11. Section 420 of the IPC provides for punishment for cheating and dishonestly inducing delivery of property. "Cheating" has been defined in Section 415 of the IPC, which is reproduced as below:
"415. Cheating- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
Explanation- A dishonest concealment of facts is a deception within the meaning of this section."
The ingredients and essence of cheating were examined by the Supreme Court in the matter of Inder Mohan Goswami and Another Vs. State of Uttaranchal and Others, while considering whether a case for quashing FIR is made out in exercise of power under Section 482 of the Code. It was observed as under:
"42. On a reading of the aforesaid section, it is manifest that in the definition there are two separate classes of acts which the person deceived may be induced to do. In the first class of acts he may be induced fraudulently or dishonestly to deliver property to any person. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but need not be fraudulent or dishonest. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning. In the matter of Dalip Kaur and Ors. Vs. Jagnar Singh and Another, the Supreme Court had an occasion to examine the provision contained in Section 415 of the IPC which defines the cheating. It was observed as under:
"8.. An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating."
In the case of Inder Mohan Goswami (supra), while examining whether a case of quashing FIR is made out or not, the question which the Supreme Court posed to itself was :
"38. The question before us is-whether the case of the appellants comes under any of the categories enumerated in Bhajan Lal? Is it a case where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in entirety, do not make out a case against the accused under Sections 420, 467 and 120-B IPC? For determination of the question it becomes relevant to note the nature of the offences alleged against the appellants, the ingredients of the offences and the averments made in the FIR/complaint.
While undertaking similar examination in the matter of quashing of FIR, in the case of Dalip Kuar (supra), the Supreme Court stressed upon the approach required to be adopted by the High Court, in following words"
"10. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception.".
12. In the light of the aforesaid two decisions, which specifically deal with the cases relating to quashment of FIR, wherein allegation of commission of offence under Section 420 of the IPC have been made, the allegations contained in the complaint, preliminary statements recorded by the Magistrate and the documents attached along with the complaint need to be examined to find out whether the allegation contained in the complaint, even if taken on its face value and accepted in its entirety, do not prima facie constitute offence or make out a case against the accused or whether the allegation made in the complaint are so absurd or inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
13. In paragraph -3 of the complaint, it has been averred that the accused falsely represented and assured the complainant through their letter dated 3rd June, 1995 followed by letter dated 5th January, 1995 and personal discussions in the presence of the witnesses and believing the representations and assurances, complainant placed an order for supply of Hydraulically Operated Semi-automatic Motorized Pipe Bending Machine, vide its letter dated 31st January, 1995. It is further averred that the accused persons had assured delivery of the machine in 9-10 weeks from 31st January, 1995 alternately 2.2.1995. It has also been stated that agreement of supply of machine was executed on 2.2.1995. Further averments contained in paragraph-5 are that though number of visits and requests for delivery of machine was made, but the same was not done and accused gave an assurance in writing on 12.6.1995 that machine will be ready by 17th June, 1995, but, the complainant did not receive delivery by 17th June, 1995 as assured. Further averment in paragraph -6 of the complainant is that when the complainant gave a notice dated 9th August, 1995, the accused, vide their letter dated 14/16th August, 1995 falsely and with intention to defraud and to cheat, replied that there was no order placed by the complainant. It has also been averred that while denying placement of any order, accused informed complainant vide their letter dated 10th November, 1995 that the machine will be ready for delivery by 14th November, 1995. When the complainant's attorney visited the factory premises on 14.11.1995, the machine was not ready and the accused No. 2 and 3 (petitioners herein) were not present. Factory premises were again visited on 15.11.1995, but none of the accused were present. In paragraph-7 of the complaint, it has been averred that accused No.2 gave dates for inspection and trial number of times, but no such inspection or successful trial was given. The complainant after sending letter dated 27.11.1995 visited factory premises number of times but no delivery was affected. In the last, it has been averred that the accused persons knew from the inception that they would not be able to deliver the machines as per specification and requirement of the complainant or as per their own assurances and yet they obtained an advance of Rs.70,000/-. It has been then alleged that accused had full knowledge that the assurances are false, yet such false representation was made regarding supply of machines, thereby committing offence under Section 420 of the IPC.
14. The averments made in the complaint have been supported by preliminary statements of Shankar Gupta as well as Vipin Chandra Kothari, wherein, they have statedthat though advance was paid and assurances was made to supply the machine in 8-10 weeks, machines were not manufactured and even though the factory premises were visited, the machines were not manufactured nor any supply was made.
15. The main plank of submission of learned counsel for the petitioner has been that even if it is accepted that having received some advance, the petitioners failed to manufacture, this would only give rise to a simple breach of contract and a claim for compensation, but none of the averments made in the complaint, makes out a case to even prima facie indicate that there was an intention to cheat right from the beginning.
16. In order to support his submissions, learned counsel for the petitioners sought to rely upon certain documents which are communications/correspondences between the parties, placed on record as Annexure A-1 to A -6. The petitioners have also placed on record a copy of judgment and decree dated 8.4.2003 passed in favour of respondent-complainant. Learned counsel for the petitioners relying upon the decision of the Supreme Court in the case of Harshendra Kumar D. (supra), submitted that these documents, which are correspondences between the parties and have also been referred to in the compliant, are beyond suspicion or doubt and, therefore, can be looked into by this Court also for the purposes of finding out as to whether the criminal proceedings are abuse of the process of law, warranting interference under Section 482 of the Code.
17. On the other hand, learned counsel for the respondent, relying upon the decision in the case of Ravindra Kumar Madhanlal Goenka (supra), submitted that these are the documents which are being used as materials to establish a defence, therefore, they cannot be looked into and entertained at the stage of entertaining petition under Section 482 of the Code, but, can only be looked into at the time of trial.
18. In the case of Ravindra Kumar Madhanlal Goenka (supra), in order to make out a case of quashing, the petitioners therein referred to certain fax messages. In that case, on fact, it was held that there is no denial of the facts that 100 bales of cotton were yet to be dispatched. It was neither urged nor fell for consideration whether those documents referred to by the accused were un-rebutted or undisputed. Therefore, they were taken as material sought to be used as defence and in that background, the Supreme Court held that while entertaining a petition under Section 482 of the Code, the materials furnished by the defence cannot be looked into and the defence materials can be entertained only at the time of trial. However, in the present case, the documents, which have been placed on record and referred to by the petitioners, are the correspondences between the parties and reference of these documents has been made in the complaint also. In the complaint, reference has been made to letter dated 3rd January, 1995, letter dated 5th January, 1995, supply order dated 31st January, 1995, letter dated 12.6.1995, letter dated 9th August, 1995 of the accused, reply letter dated 14/16th August, 1995 by the complainant as also letter dated 27.11.1995. Annexures A-1, A-2, A-3, A-4, A-5 and A-6 are the documents which have been referred to in the complaint also. Even the respondents have not disputed these letters by filing any reply on affidavit, nor have disputed contents thereof, though, respondent placed certain documents on record. In such a situation, where the documents are not disputed and are beyond suspicion or doubt, on the face of it, can be looked into while exercising inherent jurisdiction under Section 482 of the Code, as held in the case of Harshendra Kumar D. (supra). In that case (Harshendra Kumar), the Supreme Court examined the legal position with regard to scope of examination of materials placed in support of petition under Section 482 of the Code and it was held:
"24. In Awadh Kishore Gupta this Court while dealing with the scope of power under Section 482 of the Code observed: (SCC p. 701, para 13)
"13. It is to be noted that the investigation was not complete and at that stage it was impermissible for the High Court to look into materials, the acceptability of which is essentially a matter for trial. While exercising jurisdiction under Section 482 of the Code, it is not permissible for the court to act as if it was a trial Judge."
25. In our judgment, the above observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, materials relied upon by the accused which are in the nature of public documents or the materials which are beyond suspicion or doubt, in no circumstance, can be looked into by the High Court in exercise of its jurisdiction under Section 482 or for that matter in exercise of revisional jurisdiction under Section 397 of the Code. It is fairly settled now that while exercising inherent jurisdiction under Section 482 or revisional jurisdiction under Section 397 of the Code in a case where complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in an appropriate case, if on the face of the documents - which are beyond suspicion or doubt - placed by the accused, the accusations against him cannot stand, it would be travesty of justice if the accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage.
26. Criminal prosecution is a serious matter; it affects the liberty of a person. No greater damage can be done to the reputation of a person than dragging him in a criminal case. In our opinion, the High Court fell into grave error in not taking into consideration the uncontroverted documents relating to the appellant's resignation from the post of Director of the Company. Had these documents been considered by the High Court, it would have been apparent that the appellant has resigned much before the cheques were issued by the Company."
19. Therefore, I am of the opinion that in the present case, the undisputed documents, reference of which has been made in the complaint also and they are nothing but quotations, supply orders and notice, counter notice between the parties can be looked into for the limited purposes of examination as to whether from the complaint, a prima facie case of cheating is made out or not.
20. Perusal of quotation dated 3rd January, 1995 (Annexure A-1), further, quotation dated 5th January, 1995 (Annexure A-2) and supply order dated 31st January, 1995 (Annexure A-3) clearly go to show that on certain quotations given by the petitioners, supply order was given by the complainant and an advance of Rs.41,000/- under a cheque dated 31.1.1995 was given and it was also stated that rest of Rs.30,000/- would be paid by the complainant within 15 days and that total advance to be paid will be limited to Rs.71,000/-, with further stipulation that no further amount will be paid in any circumstances except the amount of advance until the machine is delivered to the factory site and complainant is satisfied with working of the machines. Clause(10) of the supply order (Annexure A-3) further shows that balance amount of Rs.1,26,000/- will be paid only after satisfactory operation and successfully-bending performed for at lest 6-7 days on different dies of different dias of pipe -cut-piece's. From the contents of letter dated 9th August, 1995 (Annexure A-4), it is revealed that that the complainant informed the petitioners regarding unsatisfactory performance of work on the part of the petitioners, giving reference to several visits in the factory premises. It was stated in the complaint that though supplies were to be made within 9 to 10 weeks w.e.f 31st January, 1995, the machines is not being delivered. From the contents of the said letter, which has been given by the complainant, what is reflected is that the complainant/its attorney had visited factory premises and they were not satisfied with the progress of work, because the supply was not made within the stipulated period. The contents of this letter given by the complainant does not show that the complainant raised any allegation that there was anything to indicate that there was an intention right from the beginning on the part of the petitioners to cheat and with that dishonest intention, complainant was induced to supply order and part with the advance money of Rs.70,000/-. In the letter dated 14th August, 1995 (Annexure A-5),which has also been referred to in the complaint, petitioners sought to justify delay on their part and stated that they have not received the entire advance amount in full, therefore, they have not booked the order and awaiting for payment of advance amount for 7 months. At the same time, the petitioner offered the complainant to take trial of available machine in the stock which is of similar nature matching specifications of the complainant.
21. Letter dated 27.11.1995 (Annexure A-6) given by the complainant, reference of which has also been made in the complaint, shows that the complainant had visited the factory premises and inspected the trial operation of Hydraulically Operated Semi-automatic Pipe Bending Machine on 14.11.1995. The letter further shows that such an inspection of trial operation was on the invitation of the petitioners vide their letter dated 10.11.1995. In that letter, the result of the inspection was noted, which indicate that the complainant was not satisfied about the quality of the machine and number of defects were noted. It was also noted that dies were not ready and petitioners were asked by the complainant to inform whether the deformities pointed out can be rectified and remedied.
22. The undisputed picture, therefore, which emerges from the complaint, preliminary statements and various documents referred to above, is that on a quotation regarding supply of machine of certain specification, complainant placed order for supply and gave an advance of Rs.70,000/-. Petitioners failed to supply the same within the stipulated period of 9-10 weeks which led to notices given and finally the petitioners offered to supply machine inviting inspection of trial operation of the machine. The trial operation of the machine was inspected by the complainant, but, they were not satisfied with the operation of the machine and certain defects were pointed out and the petitioners were asked to remedy and remove those defects as stated in letter dated 27.11.1995. The aforesaid, therefore, are broad features of the complaint. Therefore, in order to allege that there was false representation right from the beginning and that from very inception, the petitioner had no intention to supply machine of required specification, the failure on the part of the petitioners to supply machine within the time stipulated as also failure of trial operation of machine has been made a basis. There is no other material in the complaint or even in the statements or in the admitted documents to even prima facie indicate that there was existence of an intention to cheat right from the beginning either when quotations were given or when advance amount was received. As has been examined hereinabove, the intention to cheat right from the beginning of the transaction is essence of the allegation of cheating. Therefore, the complaint and other materials taken together must disclose at least prima facie something which if un-rebutted and proved by the complainant, would constitute commission of offence of cheating. The existence of material on record, without examining its veracity, does not disclose that there is a prima facie material to warrant registration of complaint against the petitioners and subject the petitioners to the agony of a criminal trial.
23. Though the learned counsel for the respondent vociferously submitted that in the complaint, it has been expressly stated that there was dishonest intention, false misrepresentation and that the petitioners right from the beginning knew very well that they are not in a position to supply the machine, yet they obtained advance amount, in the opinion of this Court, that is not sufficient to subject the petitioners to a criminal trial on allegation of commission of offence of cheating. Present is not a case that at the time when the petitioners had accepted to supply order and the advance amount, they had no manufacturing capacity at all. It is also not borne out from the complaint or any other material that petitioners are men of the street having no financial capacity or without resources or means to manufacture or supply the kind of machine for which advances were taken. Mere use of words "fraudulent, "false representation" or "cheating" is not sufficient. The complaint is required to at least disclose relevant facts and circumstances which prima facie make out ingredients of commission of offence of cheating, which, if remain un-rebutted, may lead to conviction also. In the case of V.P. Shrivastava (supra), while examining whether a case for quashing a complaint alleging commission of offence under Section 420 of the IPC is made out or not, the Supreme Court after examining the provision contained in Section 415 of the IPC observed as under :
"22. It is plain from a bare reading of the section that to hold a person guilty of cheating, as defined in Section 415 IPC, it is necessary to show that at the time of making the promise he had fraudulent or dishonest intention to retain the property or to induce the person so deceived to do something which he would not otherwise do.
25. It is well settled that in order to constitute an offence of cheating, it must be shown that the accused had fraudulent or dishonest intention at the time of making the representation or promise and such a culpable intention right at the time of entering into an agreement cannot be presumed merely from his failure to keep the promise subsequently. (Also see Hira Lal Hari Lal Bhagwati v. CBI.)
29. In our view, a mere mention of the words "defraud" and "cheat" in Para 12 of the complaint, in the setting that these have been used, is not sufficient to infer that the appellants had dishonest intention right at the beginning when, demonstrably, after due deliberations a tripartite agreement was signed, which, under the given circumstances at that juncture, was considered to be in the interest of all the three parties to the agreement. In this regard, it would be useful to advert to the following observations made by this Court in Anil Mahajan v. Bhor Industries Ltd.: (SCC p. 231, para 8) "8. The substance of the complaint is to be seen. Mere use of the expression `cheating' in the complaint is of no consequence. Except mention of the words `deceive' and `cheat' in the complaint filed before the Magistrate and `cheating' in the complaint filed before the police, there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into MoU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay."."
24. The letter dated 27.11.1995 of the complainant clearly shows that in fact the petitioners had invited the complainant to inspect the trial operation of a Hydraulically Operated semi-automatice Pipe Bending Machine and the complainant had also inspected the same on 15.11.1995, but it was not found up to satisfaction of the complainant and the complainant had therefore asked the petitioners to remove the defects. It is, therefore, also seen that in fact the petitioners had offered to sell a machine manufactured by them in their factory which was not found satisfactory upon inspection by the complainant. In the background of these facts, it would be an abuse of the process of law if the petitioners are subjected to criminal trial on allegation of commission of offence of cheating, particularly when no specific factual averments has been made in the complaint, which if proved, would constitute essential ingredients of dishonest intention from the beginning of the transaction. It has also to be noted that the complainant also filed a suit, in which, a decree has been passed in his favour. Though, learned counsel for the respondent is absolutely correct in submitting that merely because a civil wrong is also alleged, criminal action could not be avoided, in the facts and circumstances of the present case, which have been discussed hereinabove, it is considered opinion of this Court that no case is made out to warrant prosecution of the petitioners for allegation of commission of offence of cheating.
25. In the result, the petition is allowed and the criminal proceedings against the petitioners in Criminal Case No.1618/02 instituted upon complaint filed by the respondent/complainant, alleging commission of offence under Section 420 read with Section 34 of the IPC are hereby quashed.
26. No orders as to cost.