Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | SLP(Crl) No.-003415 / 2024 |
| Diary Number | 7052/2024 |
| Judge Name | HON’BLE MRS. JUSTICE B.V. NAGARATHNA |
| Bench | HON’BLE MRS. JUSTICE B.V. NAGARATHNA; HON’BLE MR. JUSTICE R. MAHADEVAN |
| Precedent Value | Binding authority |
| Overrules / Affirms | Affirms existing precedent on inherent jurisdiction and cheating under Section 420 IPC |
| Type of Law | Criminal law |
| Questions of Law |
|
| Ratio Decidendi (3–8 sentences) |
The Court held that cheating under Section 420 IPC requires proof of a fraudulent or dishonest intention at the time of making the representation, which cannot be presumed from a subsequent breach of contract. Vague allegations of wrong specifications and failure to replace goods do not satisfy the mens rea requirement. A five-year delay in lodging the FIR, unexplained by the complainant, raises suspicion and suggests mala fide litigation. Relying on Bhajan Lal’s categories for Section 482 CrPC, the Court found no prima facie case, as the FIR discloses neither a cognizable offence nor criminal conspiracy. Inherent jurisdiction must be exercised to prevent abuse of the criminal process in commercial disputes where alternative civil remedies exist. |
| Judgments Relied Upon | Inder Mohan Goswami v. State of Uttaranchal (2007) 12 SCC 1; Vesa Holdings P. Ltd. v. State of Kerala (2015) 8 SCC 293; State of Haryana v. Bhajan Lal (1992) Suppl (1) SCC 335; Vishal Noble Singh v. State of Uttar Pradesh, 2024 SCC OnLine SC 1680 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
|
| Facts as Summarised by the Court | Brothers Paramjeet and Sarabjit Singh ran stone-crushing firms; an advance of ₹5 lakhs was paid by complainant to purchase a ruula machine set. The cheque bounced on “stop payment.” Five years later, an FIR under Sections 420/120B IPC was lodged alleging wrong specifications and loss. The High Court dismissed the appellants’ Section 482 petition; the Supreme Court heard appeals together and set aside all proceedings. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | High Courts in commercial and criminal matters |
| Distinguishes | Breach of contract from cheating under Section 420 IPC |
| Follows | Inder Mohan Goswami; Vesa Holdings; Bhajan Lal; Vishal Noble Singh |
What’s New / What Lawyers Should Note
- Cheating under Section 420 IPC cannot be presumed from a mere contractual breach; fraudulent intent at inception must be pleaded with specific facts.
- Unexplained delays in filing an FIR (five years, in this case) may justify quashing under inherent jurisdiction as mala fide.
- Vague allegations of wrong specifications and failure to replace goods do not satisfy the “dishonest inducement” requirement.
- Section 482 CrPC should be invoked to prevent criminal law from becoming a tool for civil disputes or vendettas where alternative remedies exist.
- Bhajan Lal’s illustrative categories remain the guiding framework for quashing proceedings that do not disclose a cognizable offence.
Summary of Legal Reasoning
- Extracted Sections 420 and 120B IPC; emphasized mens rea requirement for cheating.
- Relied on Inder Mohan Goswami to underscore that fraudulent intention at promise stage is the “gist” of cheating.
- Noted the five-year delay in FIR without explanation, raising suspicion about complainant’s bona fides.
- Invoked Vesa Holdings: mere failure to deliver goods of promised specification is a contractual breach, not cheating.
- Applied inherent jurisdiction under Section 482 CrPC as per Bhajan Lal: no prima facie case, allegations are inherently improbable and malicious.
- Cited Vishal Noble Singh to warn against misuse of criminal justice for private agendas and the need to nip such actions in the bud.
Arguments by the Parties
Petitioner
- No fraudulent or dishonest intention at the time of entering the sale-purchase agreement; breach of contract alone cannot constitute cheating.
- Unexplained five-year delay in lodging the FIR undermines the complainant’s bona fides.
- Alternative civil remedy for damages existed; criminal proceedings amount to abuse of process.
Respondent
- Appellants induced delivery of ruula set by promising 14 tons and 1000–1200 ft/hr output, but delivered 12 tons and 500 ft/hr output.
- Failure to replace defective machine caused loss of ₹50 lakhs, warranting offences under Sections 420/120B IPC.
Factual Background
Paramjeet and Sarabjit Singh ran stone-crushing businesses. In December 2017, Soma Stone Crusher agreed to purchase a 20×40 ruula machine set from Saini Engineering Works for ₹9,12,912; ₹5 lakhs was paid by cheque in January 2018, which was dishonoured on “stop payment.” No FIR was filed then; in February 2023—five years later—the complainant lodged FIR No.11/2023 under Sections 420/120B IPC, alleging wrong specifications and loss. The High Court refused to quash; the Supreme Court allowed the appeal and writ petition.
Statutory Analysis
- Section 420 IPC mandates a fraudulent or dishonest intention at the time of the promise to constitute cheating.
- Section 120B IPC punishes criminal conspiracy in accordance with the punishment for the anticipated offence.
- Section 482 CrPC grants inherent powers to quash proceedings to prevent abuse of process, as guided by Bhajan Lal’s illustrative categories.
Alert Indicators
- ✔ Precedent Followed