2020 (6) TMI 663 - HC - Companies Law

Fraud/cheating - damaged/second hand vehicle - primary allegation of the complainant/respondent No. 2 is that all the petitioners have cheated her by giving a different vehicle, which was not booked by her and the said vehicle was second-hand defective vehicle, for which she cannot run the vehicle - HELD THAT - The selling of vehicle by the manufacturer to the dealer and the purchase of vehicle by customer from the dealer by its own choice by executing all necessary documents and it is a purely business transaction. The dealer while selling a vehicle obviously explained the features/benefits to its customer and equally the customer by its option purchased such vehicle and such transaction cannot be termed as an inducement on the part of the manufacturer/dealer/ sub-dealer within the purview of law. In the given case, there is nothing to reflect about fraudulent or dishonest intention at the time the petitioner sold the vehicle, as the complainant/respondent No. 2 purchased the vehicle by signing all the relevant documents, got the vehicle registered and vehicle run on the road for more than a year. The vehicle was brought to the dealer for servicing upto the warranty period without any complaint and only after warranty period, there was some starting problem. The condition necessary for an act to constitute an offence under Section 415 of the Penal Code is that there was dishonest inducement by the accused. In the instant case, nothing emerges to indicate that the petitioners dishonestly induced the complainant to deliver money to them. Cheating is an essential ingredient to an offence under Section 420 of the Penal Code. The ingredient necessary to constitute the offence of cheating is not made out from the face of the complaint and consequently, no offence under Section 420 is made out. Admittedly, the complainant/respondent No. 2 has lodged her complaint before the Consumer Forum, claiming damages etc. and the said forum can suitably address the issue regarding awarding compensation for damage etc. and by filing the criminal complaint, an attempt has been made by the complainant to clock the civil dispute to a criminal nature dispute despite the absence of ingredients necessary to constitute criminal offence. Criminal proceedings are not a shortcut for other remedies - Application allowed.

Issues Involved:
1. Validity of cognizance taken by the trial court.
2. Allegations of cheating and fraud.
3. Allegations of criminal breach of trust.
4. Allegations of forgery and conspiracy.
5. Adequacy of servicing and warranty claims.
6. Jurisdiction and applicability of Section 482 CrPC.

Detailed Analysis:

1. Validity of Cognizance Taken by the Trial Court:
The High Court scrutinized whether the trial court correctly took cognizance of the offences under Sections 409, 418, 420, 465, 468, read with Section 120B IPC. The court noted that the trial court directed a limited investigation under Section 202 CrPC, but the police registered a separate case (Gorchuk PS Case No. 529/2016) under the same sections. The trial court’s cognizance, despite the police case, was deemed a blatant illegality. The High Court emphasized that the trial court failed to apply judicial mind to the police report, the complaint, and the complainant's statement, ignoring the provisions of Section 210 CrPC, which mandates staying the proceeding of the police case.

2. Allegations of Cheating and Fraud:
The complainant alleged that the accused delivered a different, defective, or second-hand vehicle instead of the booked one, constituting cheating. The High Court analyzed the essential ingredients of cheating under Section 415 IPC, which includes fraudulent or dishonest inducement. The court found no evidence of dishonest inducement by the petitioners at the time of the transaction. The complainant purchased the vehicle by signing all relevant documents, and the vehicle was serviced multiple times without any complaint of inherent defect until the warranty period expired.

3. Allegations of Criminal Breach of Trust:
Under Section 405 IPC, criminal breach of trust involves dishonest misappropriation of entrusted property. The High Court found no evidence of entrustment or dishonest misappropriation by the petitioners. The complainant's allegations did not substantiate the essential ingredients of criminal breach of trust, as the vehicle was purchased and used for over a year without any immediate complaint of defect or misappropriation.

4. Allegations of Forgery and Conspiracy:
The complainant alleged forgery and conspiracy among the manufacturer, dealer, and sub-dealer. The High Court found no prima facie evidence of forgery or conspiracy. The documents and servicing records did not support the complainant's claims. The court noted that the complainant's allegations were inconsistent with the documentary evidence, including job-cards and legal notices, which did not mention any fraudulent activities or inducement.

5. Adequacy of Servicing and Warranty Claims:
The complainant claimed that the vehicle was not adequately serviced during the warranty period. The High Court examined the servicing records, which showed regular servicing, including free and paid services, until the warranty period expired. The court found that the complainant continued to use the vehicle without any major complaint until the warranty period ended, after which some issues were reported. The court concluded that the complainant's claims of inadequate servicing were not substantiated by the records.

6. Jurisdiction and Applicability of Section 482 CrPC:
The High Court invoked its jurisdiction under Section 482 CrPC to examine whether the complaint constituted the necessary ingredients for the alleged offences. The court emphasized that criminal proceedings should not be used as a shortcut for civil remedies. The court found that the complaint lacked the essential ingredients of the alleged offences and that continuing the criminal proceedings would amount to an abuse of the process of the court.

Conclusion:
The High Court quashed and set aside the entire proceeding pertaining to Complaint Case No. 2974c of 2014, pending before the Court of SDJM (S) No. 2, Kamrup (M), Guwahati. The court found that the complainant's allegations did not constitute the ingredients necessary for the alleged offences under the Penal Code, and the continuation of the criminal proceeding would be an abuse of the process of the court.

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