DCM HYUNDAI LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) This is a petition under section 482 of the Criminal Procedure Code, 1973, (for short, 'the Code') for quashing a complaint being criminal case No.360 of 2000 filed by respondent no.2, herein, against the petitioners for an offence punishable under section 420 read with section 114 of IPC. The said complaint has been placed at page no.27 at Annexure 'B' to the petition. The second respondent has been shown as the complainant and the petitioners herein have been shown as accused persons in the said complaint. There it has been alleged that the complainant being the second respondent herein is a Body Corporate carrying on business as manufacturer of various Hot Rolled Coils/sheets/plates etc. at its workplace at Hazira, in District Surat of Gujarat State. That it has its registered office at the same place. The second respondent has also alleged in the complaint that the first petitioner is a limited company and other petitioners are responsible officers and Directors of the said company. In order to appreciate the said contentions, both factual and legal, it would be appropriate to reproduce paras 3 to 8 hereinbelow:

(2.) Therefore, according to the allegations made in the complaint, the second respondent was induced to part with the goods stated in the complaint on a promise of payment of the value thereof and since the second respondent was induced as aforesaid by the petitioners herein, the second respondent parted with the goods stated in the complaint and thereafter the payment was not made and, therefore, according to the case of the second respondent, the second respondent was cheated jointly by the petitioners herein and thereby the petitioners are said to have committed an offence punishable under section 420 and read with section 114 of IPC. On receiving the said complaint, process of summons appears to have been issued by the learned Judicial Magistrate First Class at Surat. The petitioners - original accused persons have produced on record copies of summons at Annexure 'C' (colly.).

(3.) The petitioners-original accused persons in the aforesaid criminal complaints have come forward with this petition under section 482 of the said Code stating that no offence has been made out on a bare reading of the said complaint that there is only a civil dispute and no elements or ingredient of criminality has been shown in the complaint. That it is simply a contract of sale and purchase of goods on credit wherein even if it is accepted that the goods were delivered on credit by the second respondent to the petitioners and that the petitioners failed in paying the value of the said goods, then also it may amount to non-payment of goods received and consequently it would not amount to an offence of cheating. It is also contended that there is no element of inducement in the complaint but there is a case of genuine sale and purchase between the parties. Therefore, the question of inducement does not arise and consequently it would not be an offence of cheating. It is further contended that for the purpose of committing an offence of cheating, it is always necessary that there is dishonest intention on the part of the accused person right from the inception. That in the present case, the parties were at contract for sale and purchase of goods. Some goods were delivered to the petitioners on credit and thereafter, payments were made. However, at subsequent stage, because of the adverse financial condition of the petitioners, payments could not be made and, therefore mere non-payment in respect of the goods purchased on credit and received by the petitioner company would not amount to an offence of cheating. That there would also be a matter of civil dispute between the parties without any element of criminality. It is further contended that the second respondent had supplied goods to the petitioners valued at more than Rs. 4 crores during the year 1995-97, in ordinary course of business and had raised various invoices on the first petitioner for the supplies so made. However, the first petitioner, against the said supplies made by the second respondent, had paid on various dates, a total amount of more than Rs. 3,00,50,000 to the second respondent. That these dealings make it clear that the petitioners did not possess fraudulent intention at any point of time. That on account of adverse financial condition the first petitioner was required to file an application before the Board of Industrial and Financial Reconstruction (for short, 'the BIFR') under the Sick Industrial Companies (Special Provisions) Act, 1985. That the said revision was registered as Case No.151/98 and that since the BIFR was satisfied with the net worth of the first petitioner company it has declared the first petitioner company as a sick industrial company under the provisions of Section No.3(i) of the said Act and appointed Industrial Finance Corporation of India Limited which has been named as IFCI limited as he operating agency under section 17(3) of the said Act for formulating and considering the viability of rehabilitation scheme and to suggest measures for reconstructing the first petitioner company. That the learned Judicial Magistrate did not apply his mind to the facts and circumstances of the case and has straight way issued process mechanically on the complaint. That in that view of the matter, the complaint also suffers from infirmity of non-application of mind. That on the one hand there may be civil dispute between the parties, on the other hand, mere non-payment of the value of the goods purchased on credit may amount to criminal offence. Thirdly, it is contended that there is no case of fraudulent or dishonest inducement. That there is also no element of cheating on the part of the petitioners and, therefore, no offence is made out even on a bare reading of the complaint in question. In above view of the matter, the petitioners have come with this petition under section 482 of the said Code for quashing the said complaint being criminal complaint No.360 of 2000 pending before the learned Judicial Magistrate First Class, Surat.