Case: Ajay Mitra Vs. State Of M.P.

as follows: "Where the charge against the accused is under S. 420 in that he induced the complainant to part with his goods, on the understanding that the accused would pay for the same on delivery but did not pay, if the accused had at the time he promised to pay cash against delivery an intention to do so, the fact that he did not pay would not convert the transaction into one of cheating. But if on the other hand he had no intention whatsoever to pay but merely said that he would do so in order to induce the complainant to part with the goods then a case of cheating would be established". 17. In Hari Prasad Chamaria vs. Bishun Kumar Surekha and others. AIR 1974 SC 301 it was held that unless the complaint showed that the accused had dishonest or fraudulent intention at the time the complainant parted with the money it would not amount to an offence under Section 420 IPC and it may only amount to breach of contract. In G.V. Rao vs. L.H.V. Prasad & Ors. 2000(3) SCC 693, it was reiterated that guilty intention is an essential ingredient of the offence of cheating and, therefore, to secure conviction mens rea on the part of the accused must be established. It has been further held that in order to constitute the offence of cheating the intention to deceive should be in existence at the time when the inducement was offered. 18. So far as the present appellants are concerned, they came into picture much later in July 1999, when various trademarks and brands of A-1 were purchased by A-6. The appellants were not at all in picture at the time when the complainant claims to have spent money in improvement of its bottling plant on the basis of the agreement executed with Cadbury Schweppes Beverages India Pvt. Ltd. (A-1). Since the appellants were not in picture at all at the time when the complainant alleges to have spent money in improving the bottling plant, neither any guilty intention can be attributed to them nor there can possibly be any intention on their part to deceive the complainant. No offence of cheating can, therefore, be said to have been committed by the appellants on account of the fact that a notice was given to the complainant that the bottling agreements will not be renewed any further after expiry of the initial term. Thus, even if the allegations made in the complaint are accepted to be absolutely true and correct, the appellants cannot be said to have committed any offence of cheating as provided in Section 420 IPC.19. The High Court has held that the Petitions filed by the appellants for quashing the complaint and the FIRs registered against them are pre-mature. The question which arises is that where the complaint or the FIR does not disclose commission of a cognizable offence, whether the same can be quashed at the initial stage? This question was examined by this Court in State of West Bengal & Ors. vs. Swapan Kumar Guha and others, AIR 1982 SC 949 and it was held that the First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot from the foundation or constitute the starting point of a lawful investigation. It is surely not within the province of the police to investigate into a Report (FIR) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases. It was further held that an investigation can be quashed if no cognizable offence is disclosed by the FIR. The same question has been considered in State of Haryana & others vs. Ch. Bhajan Lal & others, AIR 1992 SC 604 and after considering all the earlier decisions, the category of cases, in which the Court can exercise its extra-ordinary power under Article 226 of the Constitution or the inherent power under Section 482 Cr.P.C. either to prevent abuse of the process of any Court or to secure the ends of justice, were sumarised in para 108 of the Report and sub-paras 1 to 3 thereof are being reproduced hereinbelow: "1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused". 20. As mentioned earlier, the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute any offence as against the appellants. Therefore, the complaint filed by the respondent and the FIRs registered in pursuance thereof are liable to be quashed. Trisuns Chemical Industry vs. Rajesh Agarwal & others (1999(8) SCC 686) cited by learned counsel for the complainant is clearly distinguishable as in the said case the allegation in the complaint was that the complainant had paid in advance a price higher than the market price for purchasing "toasted soyabean extracts" but the accused sent the commodity which was of most inferior and substandard quality due to which the complainant suffered a loss of Rs. 17 lakhs. In view of the allegations made in the complaint, the matter required investigation and the proceedings could not have been quashed on the ground that the dispute was of a civil nature.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18. So far as the present appellants are concerned, they came into picture much later in July 1999, when various trademarks and brands of A-1 were purchased by A-6. The appellants were not at all in picture at the time when the complainant claims to have spent money in improvement of its bottling plant on the basis of the agreement executed with Cadbury Schweppes Beverages India Pvt. Ltd. (A-1). Since the appellants were not in picture at all at the time when the complainant alleges to have spent money in improving the bottling plant, neither any guilty intention can be attributed to them nor there can possibly be any intention on their part to deceive the complainant. No offence of cheating can, therefore, be said to have been committed by the appellants on account of the fact that a notice was given to the complainant that the bottling agreements will not be renewed any further after expiry of the initial term. Thus, even if the allegations made in the complaint are accepted to be absolutely true and correct, the appellants cannot be said to have committed any offence of cheating as provided in Section 420 IPC.19. The High Court has held that the Petitions filed by the appellants for quashing the complaint and the FIRs registered against them are pre-mature.The question which arises is that where the complaint or the FIR does not disclose commission of a cognizable offence, whether the same can be quashed at the initialstage? This question was examined by this Court in State of West Bengal & Ors. vs. Swapan Kumar Guha and others, AIR 1982 SC 949  and it was held that the First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot from the foundation or constitute the starting point of a lawful investigation. It is surely not within the province of the police to investigate into a Report (FIR) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases. It was further held that an investigation can be quashed if no cognizable offence is disclosed by the FIR. The same question has been considered in State of Haryana & others vs. Ch. Bhajan Lal & others, AIR 1992 SC 604  and after considering all the earlier decisions, the category of cases, in which the Court can exercise its extra-ordinary power under Article 226 of the Constitution or the inherent power under Section 482 Cr.P.C. either to prevent abuse of the process of any Court or to secure the ends of justice, were sumarised in para 108 of the Report and sub-paras 1 to 3 thereof are being reproducedWhere the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused".As mentioned earlier, the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute any offence as against the appellants. Therefore, the complaint filed by the respondent and the FIRs registered in pursuance thereof are liable to be quashed. Trisuns Chemical Industry vs. Rajesh Agarwal & others (1999(8) SCC 686) cited by learned counsel for the complainant is clearly distinguishable as in the said case the allegation in the complaint was that the complainant had paid in advance a price higher than the market price for purchasing "toasted soyabean extracts" but the accused sent the commodity which was of most inferior and substandard quality due to which the complainant suffered a loss of Rs. 17 lakhs. In view of the allegations made in the complaint, the matter required investigation and the proceedings could not have been quashed on the ground that the dispute was of a civil nature.