2004 (3) TMI 807 - SC - Indian Laws

Seeking to quash a FIR alleging offences u/s 420/120B of the IPC - discrepancies related to a truck purchase financed - Appellant allegedly failed to pay the Respondent his entitled share from an insurance claim leading to the filing of the complaint - HELD THAT - It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is condition precedent for an offence Under Section 420 of the Indian Penal Code. In our view petition of complaint does not disclose any criminal offence at all much less any offence either Under Section 420 or Section 120B of the Indian Penal Code and the present case is a case of purely civil dispute between the parties for which remedy lies before a Civil Court by filing a properly constituted suit. In our opinion in view of these facts allowing the police investigation to continue would amount to an abuse of the process of Court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers Under Section 482 of the Code of Criminal Procedure which it has erroneously refused. Based on the findings the Supreme Court allowed the appeal set aside the High Court s order and quashed the police investigation and prosecution against the Appellant and M/s. Gopalika Finance Corporation Ltd. The Court deemed the continuation of the investigation as an abuse of the court process and directed the parties to seek civil remedies for the dispute. No separate judgment was delivered by the judges in this case.

Summary

Issues Involved:
The judgment involves the challenge to the dismissal of a petition u/s 482 of the Code of Criminal Procedure seeking to quash a first information report alleging offenses u/s 420/120B of the Indian Penal Code.

Details of the Judgment:

Issue 1: Background and Allegations
The complaint was filed against the Appellant and his deceased brother by the Respondent for financial discrepancies related to a truck purchase financed by M/s. Gopalika Finance Corporation Ltd. The Appellant allegedly failed to pay the Respondent his entitled share from an insurance claim, leading to the filing of the complaint.

Issue 2: Legal Proceedings
Upon the complaint, a first information report was registered against the accused, including the Appellant. The Appellant challenged the FIR through a petition u/s 482 of the CrPC, which was initially stayed but ultimately dismissed by the High Court, leading to an appeal before the Supreme Court.

Issue 3: Examination of Criminal Offense
The Supreme Court analyzed the allegations in the complaint and concluded that no criminal offense, especially u/s 420/120B of the IPC, was established. The Court noted that the complaint primarily revolved around a civil dispute rather than a criminal offense, emphasizing the lack of intent to cheat at the inception of the agreement.

Issue 4: Quashing of Prosecution
Based on the findings, the Supreme Court allowed the appeal, set aside the High Court's order, and quashed the police investigation and prosecution against the Appellant and M/s. Gopalika Finance Corporation Ltd. The Court deemed the continuation of the investigation as an abuse of the court process and directed the parties to seek civil remedies for the dispute.

Separate Judgment:
No separate judgment was delivered by the judges in this case.