Deciding Authority: The Supreme Court of India
Name of the Judges: D.P. Mohapatra & P. Venkatarama Reddi
Date of Judgement: 24/01/2002
Facts: The respondent, herein, filed a private complaint in the court of Chief Judicial Magistrate, Indore, alleging that the appellant committed an offence of cheating in relation to a transaction of supply of 1500 mt. tons of ‘polypropylene brastec’ which is a raw material required for manufacture of HDPE/PP bags. In January 1994 the respondent- Company placed orders on a German Company named M/s. Kunstoplast Chemic GMBH . for the supply of 1500 mt. tons of polypropylene brastec through the media of the appellant in accordance with the price and terms specified in two indents. According to the appellant, it is a business agent of the German Company, though according to the respondent, the appellant claimed to be a representative and associate of the German Company. Pursuant to the deal, an irrevocable letter of credit was opened in favour of the German Company covering the value of entire quantity of 1500 mt. tons. Out of that quantity, only 50 MTs. were shipped on 09.03.1994 and the letter of credit was encashed to that extent. The remaining quantity which was expected to be supplied as per the contract was not shipped and the correspondence and personal talks with the appellant did not evoke any positive response. Finally, on 29.4.1994, the appellant-company informed the respondent that the remaining 1450 mt. tons cannot be shipped due to some unforeseen circumstances. The appellant requested that the L.C. may be treated as cancelled. As a result of non-fulfillment of obligation under the contract, it is claimed by the respondent that it suffered a loss of $ 2,36,250/- on account of escalation of prices. It is the case of the complainant that on account of rise in prices during the interregnum, the appellant and the German company deliberately failed to honour the commitment in order to profit themselves at the expense of the respondent. It is alleged that the intention of the accused gathered from the initial representation and the subsequent conduct proves the deceptive intention from the beginning. According to the respondent-complainant, the appellant was trying to gain time on one pretext or the other right from the date of opening the letter of credit in furtherance of its criminal intention to cheat. The complainant also alleged that it was induced to believe by the representation of the appellant that the entire quantity would be supplied within the stipulated period on receipt of irrevocable letter of credit and on the strength of this representation, the contract was entered into. Challenging the legality of the summoning order dated 2.9.1995, the appellant filed an application under Section 482 Cr.P.C. in the High Court. The petition was disposed of with the direction that that the learned C.J.M. Indore, where the matter is pending for disposal in accordance with law on merits, shall consider all the objections raised by appellant in this petition and shall pass a reasoned order on the same. The appellant then filed objections before the C.J.M., Indore, and sought for dropping the proceedings. By a reasoned order dated 3.10.1996, the C.J.M., Indore, rejected the application. The learned C.J.M., held that there were substantial grounds to make out a prima facie case under Section 420 IPC and it will not be proper to drop the proceedings at this stage. The C.J.M., Indore, accordingly re-affirmed the order of his predecessor in issuing the summons to the accused. Aggrieved thereby, the appellant once again moved the High Court under Section 482Cr.P.C. The High Court disposed of the petition as follows :- “this matter is pending from 1996. This is a petition u/s 482 Cr.P.C. for dropping the proceedings of the private complaint. The appellant has come up against the issue of the process. This petition is disposed of with the observation that the applicant shall have right to raise all the grounds at the time of framing charge.” It is against this order that the present SLP has been filed.
Judgement: Mr. Shanti Bhushan, learned senior counsel appearing for the appellant, vehemently protested against the stance of the High Court in refraining from giving a verdict on merits, despite its earlier order. The learned counsel then took the Court through the complaint and the statement of the law Officer of the respondent-Company and submitted that they do not disclose an offence of cheating within the meaning of Section 415. The learned senior counsel Mr. R.R. Misra, for the respondents, contended that there is no case for interference as the High Court has given liberty to the appellant to raise the relevant objections at the time of framing the charges. That apart, it is submitted that it is pre-mature to hold that the appellant did not cheat the respondents and that it is purely in the nature of civil claim. The relevant portions of the complaint were referred to and it was submitted that no error has been committed by the learned C.J.M., in taking the cognizance and issuing the process to the accused. The High Court in the Court’s opinion was not justified in declining to exercise its jurisdiction and adjudicating the matter on merits. On an earlier occasion when the appellant moved the High Court, the High Court directed the C.J.M., Indore, to consider the objections raised by the appellant and to pass a reasoned order. Thereafter, the C.J.M., Indore, passed an order overruling the objections and decided to proceed with the case. When the appellant approached the High Court again against the speaking order passed by the C.J.M., the High Court once again declined to decide the petition on merits, but left it to be raised before the trial court at the time of framing the charge. Raising the very same objections at the time of framing the charge would practically be an empty formality as the trial court had already taken a definite view in the matter. The High Court in passing the impugned order has virtually ignored the spirit behind the direction given and observations made in the earlier order.
Decision:
The Court is, therefore, inclined to set aside the impugned order of the High Court and remit the matter back to the High Court for fresh disposal of the petition – M.Cr.C. No. 4193 of 1998 for a decision on merits expeditiously.
Sudipta Bhowmick, 4th Year, B.A. LL.B., School of Law, KIIT University
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