TaxTMI 
TaxTMI 
2021 (9) TMI 707
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....pposite party No.2: a) The petitioners are the partners of Shree Raj Steal Products having its office at 20 Mullick Street within P.S - Burrabazar, Kolkata- 700007. b) The opposite party No.2 is a businessman dealing with sale and supply of iron and steel materials including CR Coil. The petitioners placed an order for supply of 60.52 M.T of C.R Coil with the opposite party No.2. The opposite party No.2 sold said materials at a consideration price of Rs. 24,24,723/- only and supplied the materials to the petitioners. The petitioners also issued five cheques dated 10th June, 2013, 21st June, 2013, 11th July, 2013, 22nd July, 2013 and 30th July, 2013 of different amounts, total being the entire consideration price for 60.52 Mt. C.R Coil. The opposite party No.2 presented the said cheques to the banker for encashment but the said cheques were dishonoured and returned to him. Subsequently, the petitioners paid a sum of Rs. 8 lakh to the opposite party No.2 and at present the outstanding dues payable by the petitioners in favour of opposite party No.2 is Rs. 16,24,723. The opposite party No.2 requested the petitioners repeatedly to make payment of such outstanding dues....
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....tion the said fact in his subsequent complaint under Section 156(3) of the Code. According to Mr. Bhattacharjee, amounts to practising fraud upon the court. Secondly, it is submitted by him that the opposite party No.2 manufactured some new grounds of cheating and criminal misappropriation in the petition of complaint under Section 156(3) of the Code. Admittedly, the petitioners never denied their obligation to make payment of dues to the opposite party No.2. It is also not disputed that the petitioners have already paid Rs. 8 (eight) lakh to the opposite party No.2 and at present outstanding dues is Rs. 16,24,723/- only. When the petitioners made part payment of their dues, question of deception and fraud does not arise. 6. Last but not the least, it is urged by the learned Advocate for the petitioner that the dispute between the parties is essentially civil in nature. The petitioners submitted an order for purchasing certain amount of materials from the opposite party No.2. He agreed to sale the said materials at a consideration price of Rs. 24,24,723/-. The petitioners made part payment of the outstanding dues and if at all the allegations made by the opposite party is true t....
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....stated as to how the complainant company was duped. The complainant filed a complaint under Section 138 of the NI Act and the said complaint was pending. The Hon'ble Supreme Court held that there is no occasion for the complainant to prosecute the appellants under Sections 406/420 IPC and in its doing so it is clearly abuse of the process of law and prosecution against the appellant was quashed. 9. The Hon'ble Supreme Court in the case of Anil Mahajan (supra) lays down a fine line of distinction between cheating and breach of contract. It is observed by the Hon'ble Supreme Court that failure of a person to keep up promise subsequently, a culpable intention right at the beginning, that is when he made the promise cannot be presumed. A distinction has to be kept in mind between mere breach of conduct and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent contact is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. The substance of the complaint is to be seen. Mere use of the expression 'chea....
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....16 on the ground that the dispute between the parties was essentially civil in nature. Challenging the said final report. The opposite party no.2 preferred a narazi petition whereupon a direction was passed for further investigation of this case. Subsequently, police submitted charge-sheet against the petitioners on 27th November, 2019 under Section 406/420/120B of the Indian Penal Code. During investigation of the case. It was brought to the notice of the Investigating Officer that the opposite party No.2 had filed a complaint under Section 138/141 of the Negotiable Instrument Act. The trial court returned the complaint to file the same before a court of competent jurisdiction. But the opposite party did not file the said complaint to a court having jurisdiction to try the case under the Negotiable Instrument Act. It is stated in the written argument that there is no impediment or bar in filing a complaint under Section 406/420 of the IPC without filing a complaint under Section 138/141 of the Negotiable Instrument Act. Both the penal provisions operate in different fields. Therefore the FIR under Section 406/420 of the IPC cannot be quashed on the ground of non filing of complain....
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....iminal offence. 16. Having heard the learned Advocates for the parties and on careful perusal written notes of argument submitted on behalf of the opposite party No.2, one uncontroverted factual situation comes to the surface. The opposite party No.2 supplied C.R Coil amounting to Rs. 24,24,723/- to the petitioners. Petitioners made part payment of the consideration price amounting to Rs. 8 lakh. Thus, a sum of Rs. 1624723/- is lying due. In Indian Oil Corporation vs. Nepc India Ltd. (supra) relied on by the learned Advocate for the opposite party No.2, it was held by the Hon'ble Supreme Court that the distinction between breach of contract and the offence of cheating depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this, subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessa....
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....t laid down the categories of cases where the High Court may, in exercise of powers under Section 226 of the Constitution of India or under Section 482 of the Code, interfere in a proceeding to prevent abuse of process of the court or otherwise to secure ends of justice; a) Where the allegations in the First Information Report and other materials, if any, accompanying the FIR did not disclose a cognizable offence under Section 154 of the Code. b) 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. c) 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. d) Where the allegations made in the FIR or the complaint are 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. e) Where t....