HC Refuses to Quash Cheating Case; Disputed Facts Require Trial | Biz Flow Kit
HC Refuses to Quash Cheating Case; Disputed Facts Require Trial
Sarada Jute Mills and its directors found themselves facing criminal charges, including cheating and criminal breach of trust, after a supplier, P.G. Electricals, accused them of a calculated fraud. The supplier claimed the mill owners had induced them to provide electrical goods worth over Rs. 11 lakh by projecting a healthy financial image, only to go silent on payments once the goods were delivered in 2015.
The petitioners approached the High Court to quash the case, arguing that this was nothing more than a simple civil dispute over a bill. They even questioned whether the goods were ever delivered, pointing out that signed challans or transport records were missing. However, the supplier fought back with bank statements and ledger entries showing that the two companies had a long-standing business relationship.
Issue Raised: Can a criminal case for cheating be dismissed at the early stages if the dispute stems from a business deal, even if the “dishonest intention” is still being debated?
HC Held: The Calcutta High Court dismissed the petition, refusing to step in and stop the trial. The Judges were particularly bothered by the mill owners’ inconsistent story. Initially, the petitioners denied having any business dealings with the supplier at all. Once they were confronted with bank records showing a prior relationship, they shifted their defence.
The Court ruled that when a party denies that a transaction occurred after allegedly receiving the goods, especially after lying about their past relationship, it creates a strong suspicion of dishonest intent. While the petitioners argued this was a civil matter, the Court clarified that a single incident can have both civil and criminal consequences. Questions about whether the invoices were real or if the goods actually arrived are “matters of trial”. Since there was enough evidence to suggest a potential crime, the Court held it would be improper to use its special powers to shut the case down before the facts could be fully examined in court.
To Read Full Judgment, Download PDF Given Below
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