S B GOENKA Vs. RAJENDRA PRASAD AGARWALLA

JUDGEMENT

(1.) THE petitioner, a Director of Messrs Foods, Fats and Fertilisers Limited, a company registered under the Companies Act, 1956, has filed this writ application for quashing the criminal proceeding instituted against him under Section 420 of the Penal Code by the opposite party.

(2.) THE company specialises in the manufacture of special types of fats, fertilisers and especially of an oil made out of mango kernel. It needs a large quantity of mango kernels and acquires the same from various parts of the country through its agents and brokers. One Govindaram of Messrs Govindaram Nichaldas and Co., a company of brokers, acted as the commission agent of the petitioner. As per the allegations contained in the complaint petition, in the second week of September, 1978 the petitioner and Govindaram placed an order for supply of mango kernels at the rate of Rs. 750.00 per M. T. - F. O. R. Tadepalligudem (where the factory of the petitioner is located). It is alleged that the petitioner had assured the opposite party that the kernels could be booked under the Hundi covering approximately 70 per cent of their value and the balance 30 per cent would be paid after the goods reached the destination. On the aforesaid terms, a contract was entered into between the parties. In pursuance of the said contract, the opposite party despatched 460 bags of mango kernel in two consignments it is alleged that the petitioner honoured the Hundis and paid the entire amount to the extent of 70 per cent of their value but did not pay the balance of 30 per cent intentionally. The opposite party thereupon lodged the complaint alleging commission of offence under Section 420 of the Penal Code.

(3.) EVERY breach of contract does not constitute an act of cheating. Dishonest intention could not be inferred from the mere fact that the petitioner did not subsequently fulfil the promise. There was no material before the Magistrate on which he could be satisfied that the petitioner had any dishonest intention at the time of the alleged promise or inducement. The dispute was purely of a civil nature. The proceeding initiated was clearly an abuse of the process of Court and on the facts alleged no process ought to have been directed to be issued against the petitioner. Relying on the dictum of their Lordships of the supreme Court in Trilok Singh's case (AIR 1979 SC 850) : (1980 Cri LJ 822), I quash the proceeding.