V.Y. JOSE & ANR. versus STATE OF GUJARAT & ANR.

Citation: [2008] 17 S.C.R. 588 · Decided: 16-12-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2008] 17 S.C.R. 588 
e 
> 
A 
V.Y. JOSE & ANR. 
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\I. 
STATE OF GUJARAT & ANR. 
r-
(Criminal Appeal No. 2048 of 2008) 
B 
DECEMBER 16, 2008 
[S.B. SINHA AND CYRIAC JOSEPH, JJ.] 
Code of Criminal Procedure, 1973: 
s.482 -
Scope of -
Complaint under s.420 !PC -
c Quashing of - Held: Absence of averments in complaint 
petition wherefrom ingredients of offence of cheating could be 
made - Hence, case not made out for criminal trial - High 
~ 
Court erred in not quashing the complaint/proceedings -
; 
Penal Code, 1860 - s.420. 
D 
Penal Code, 1860: 
s.420 - Cheating - Essential ingredients of. 
s.420 - Offence of cheating vis-a-vis breach of contract-
Distinction between. 
E 
Criminal Law: 
Criminal proceedings - If barred only on the ground that 
civil law could be taken recourse to. 
Respondent no.2-complainant firm placed an order 
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to manufacture a machine on the firm in which appellant 
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F 1 was the partner and appellant 2 was the employee. 
.Jim
Complainant firm paid advance of Rs.3 lacs. A partner of 
j 
complainant-firm found that the machine manufactured 
did not conform to the specifications in the order placed 
and refused to take delivery thereof. The complainant 
G called upon the Firm to pay the advance amount along 
with interest. In reply, the complainant firm was asked to 
take delivery of the machine. Thereafter complaint was 
filed. The CMM took cognizance of the offences against 
f ... 
the appellants under ss.417, 420 r.w. s.114 IPC. Appellants 
H' 
588 
V.Y. JOSE & ANR. v. STATE OF GUJARAT & ANR. 
· 589 
filed application before High Court for quashing of 
A 
proceedings which was dismissed. 
In appeal to this Court, the appellants contended that 
the allegations made in the complaint petition even if 
given face value and taken to be correct in its entirety did 
not disclose an offence under s.420 IPC; a breach of 
B 
contract simpliciter did not constitute an offence under 
s.420 IPC; and that there was no averment in the 
complaint petition to the effect that the appellant had an 
intention to cheat at the time of entering into the contract. 
Allowing the appeal, the Court 
C 
HELD: 1. For the purpose of constituting an offence 
of cheating, the complainant is required to show that the 
accused had fraudulent or dishonest intention at the time 
of making promise or representation. Even in a case 
where allegations are made in regard to failure on the part o 
of the accused to keep his promise, in absence of a 
culpable intention at the time of making i'nitial promise 
being absent, no offence under s.420 IPC can be said to 
have been made out. The facts disclosing the ingredients 
of the offence must be averred in the complaint petition. 
There cannot, furthermore, be any doubt that only 
because civil law can be taken recourse to would not 
necessarily mean that criminal,,proceedings should be 
oarred. [Paras 12 and 13] [596-8-C, D-E] 
Pratibha Rani v. Suraj Kumar & Anr. (1985) 2 SCC 370; 
Rajesh Bajaj v. State NC'! of Delhi & Ors. (1999) 3 SCC 259; 
Trisuns Chemical Industry v. Rajesh Agarwal & Ors. (1999) 8 
SCC 686 and State ofHaryana & Ors. v. Bhajan Lal & Ors. 
(1992) Supp.1 sec 335, relied on. 
E 
F 
2. There exists a distinction between pure 
contractual dispute of civil nature and an offence of G 
cheating. Although breach of contract per se would not 
come in the way of initiation of a criminal proceeding, 
there cannot be any doubt whatsoever that in absence 
of the averments made in the complaint petition 
H 
590 
SUPREME COURT REPORTS 
[2008) 17 S.C.R. 
A wherefrom the ingredients of an offence can be found 
out, the court should not hesitate to exercise its 
jurisdiction under s.482, Cr.P.C. One of the ingredients of 
cheating as defined in s.415 IPC is existence of an 
intention of making initial promise or existence thereof 
8 from the very beginning of formation of contract. S.482 
Cr.P.C. saves the inherent power of the court. It serves a 
salutary purpose viz. a person should not undergo 
harassment of litigation for a number of years although 
no case has been made out against him. It is one thing 
to say that a case has been made out for trial and as such 
C the criminal proceedings should not be quashed but it is 
another thing ·to say that a person should undergo a 
criminal trial despite the fact that no case has been made 
out at all. [Para 15] [600-A-E] 
Hira Lal Hari Lal Bhagwati v. CBI (2003) 5 SCC 257; 
D Indian Oil Corporation v. NEPC India Ltd. & Ors. (2006)

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