2008 (12) TMI 810 - SC - Indian Laws

Summary

Issues Involved:
1. Quashing of summons issued in Crime No. 32 of 2005.
2. Allegations of criminal conspiracy, cheating, and criminal breach of trust u/s 120B, 409, and 420 IPC.
3. Civil liability vs. criminal liability in the context of a contractual dispute.

Summary:

1. Quashing of Summons:
The appellants challenged the judgment dated 2.3.2006 by the High Court of Madras, which dismissed their applications for quashing the summons issued in Crime No. 32 of 2005. The complaint was filed by a partner of M/s. Aarbee Apparels Impex under Sections 120B, 409, and 420 IPC.

2. Allegations of Criminal Conspiracy, Cheating, and Criminal Breach of Trust:
The complaint alleged that the appellants, who are associated with M/s. T.M.S. Fashion Private Limited, approached Aarbee Apparels Impex for the supply of garments to a German buyer. Despite issuing inspection certificates, the buyer rejected the goods as sub-standard. The complainant accused the appellants of misrepresentation regarding the quality of goods and the validity of the Letter of Credit, leading to financial losses.

3. Civil Liability vs. Criminal Liability:
The Supreme Court noted that the dispute arose from a contractual relationship and the allegations did not reveal any misrepresentation at the time of contract formation. The Court emphasized that the liability of the appellants, if any, was civil in nature. The ingredients of the offenses under Sections 420, 405, and 409 IPC were not met as there was no deception or fraudulent inducement at the time of contract formation, nor was there any criminal breach of trust.

Conclusion:
The Supreme Court concluded that the allegations pertained to a civil dispute over defective goods and did not constitute a cognizable offense. The impugned judgment was set aside, and the summons issued to the appellants were quashed. The appeal was allowed.