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TMI Blog2025 (5) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... f "Ansh Prints". The nature of the business activity of the second respondent is to subject the Grey cloths purchased from weavers and process them for "Dyeing prints" and "Bal prints". As a further process, the printed sarees are sent for cutting and saree work. The second respondent sells the finished printed and work saree products. The appellant is the director of a company registered in Sri Lanka and is doing business under the name and style of "Maayu Import and Export Ltd," having its registered office at 103, 3rd Cross Street, Colombo-11, Sri Lanka. The places of business activity of the appellant and the respondent are noted to appreciate the subtle intricacy involved in the matter. In March 2012, the appellant and the second respondent came into contact with each other and commenced the business of exporting sarees sold by the second respondent. The export of sarees sold by the second respondent and purchased by the appellant has been facilitated through M/s. Oswal Overseas, inasmuch as the goods could be exported through an entity with an export-import license from the Government of India. The above narrative is not disputed by the parties and is stated to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Packing List No. AP- 1 to 98 goods were sent through M/s. Oswal Overseas to the appellant in Sri Lanka. However, the other packing list No. AP- 99 to 103 worth Rs. 4,46,764/- for some reason could not be sent by Vikrambhai to the appellant in Sri Lanka. Vikrambhai paid the money for the said goods to the second respondent. Hence, the total goods worth Rs. 34,71,344/- were exported through M/s. Oswal Overseas to the accused. 3.5 Until March 2014, the second respondent had sent the goods to the appellant, but despite repeated demand, no payment was made. Consequently, the second respondent had himself gone to Sri Lanka to the appellant, and the appellant had assured him of payment regarding the same. After the second respondent returned to Surat, the appellant stopped receiving his calls in March 2016. Hence, the FIR was registered. 4. The appellant filed R/Criminal Misc. Application No. 11506 of 2017 under section 482 of the Code for quashing the subject FIR. The foremost grounds, from the nature of the relationship between the appellant and the respondent for invoking the jurisdiction of the High Court under section 482 of the Code are summarised as thus: a. The FIR refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in the FIR do not make out an offence of criminal breach of trust or cheating. The FIR refers to the total outstanding from the export made through M/s. Oswal Overseas as Rs. 39,18,108/- and the consignment worth Rs. 4,46,764/- could not be exported to the appellant. M/s. Oswal Overseas, through one Vikrambhai, paid the said amount to the second respondent, thus reducing the unpaid sale consideration of exports made to the appellant to Rs. 34,71,344/-. Either for un-exported or exported goods, the liability towards the unpaid sale price is with M/s. Oswal Overseas. As per the transfer documents, the unpaid sale price can be recovered only by M/s. Oswal Overseas and the second respondent by treating the director of M/s. Oswal Overseas, as a witness, cannot convert a pure and simple dispute on unpaid sale price by the appellant into criminal prosecution under sections 406 and 420 of the IPC. The appellant prays for quashment of the FIR not by looking at any extraneous documents but by accepting the accusation in the FIR. 7. Mr. Mohit D. Ram, learned Counsel, appearing for the second respondent, contends that business transactions have happened, and sarees have been exported thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence is not permissible at this stage. 8.3 Pratibha v. Rameshwari Devi (2007) 12 SCC 369. It is not open to the High Court to rely on the report of the investigating agency, nor can it direct the report to be submitted before it as the law is very clear that the report of the investigating agency may be accepted by the Magistrate, or the Magistrate may reject the same on consideration of the material on record. Such being the position, the report of the investigating agency cannot be relied on by the High Court while exercising powers under section 482 of the Code. 9. The FIR has been registered under sections 406 and 420 of the IPC. The scope and expanse of these sections is better appreciated in the company of sections 405 and 415 of the IPC. This court in the case of Radheyshyam v. State of Rajasthan 2024 SCC OnLine SC 2311., culled out the following ingredients to constitute the criminal breach of trust: "11. For an offence punishable under Section 406, IPC, the following ingredients must exist: i. The accused was entrusted with property, or entrusted with dominion over property; ii. The accused had dishonestly misappropriated or converted to their own use that proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 SCC 739., as under: "16. The ingredients to constitute an offence of cheating are as follows: 16.1. There should be fraudulent or dishonest inducement of a person by deceiving him: 16.1.1. The person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or 16.1.2. The person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and 16.2. In cases covered by 16.1.2. above, the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property. 17. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating. 18. xxx xxx xxx 19. The ingredients to constitute an offence under Section 420 are as follows: 19.1 A person must commit the offence of cheating under Section 415; and 19.2 The person cheated must be dishonestly induced to: (a) deliver property to any person; or (b) make, alter or destroy valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and criminal breach of trust. We have perused the FIR and are convinced that the inducement is an explanation to contradict the documents through which exports have been completed. In the circumstances of this case, by referring to inducement, the continuation of investigation/prosecution into the offence of cheating and breach of trust would amount to an abuse of the process of law. Further, what begs the question is whether such non-payment of the sale price can be an offence of criminal breach of trust and cheating at the hands of the second respondent. The answer is clearly no. 13. As per the FIR, the goods were to be exported out of India. The respondent no. 2, since did not possess an import/export license, the appellant had asked respondent no. 2 to export the goods through M/s. Oswal Overseas. Accordingly, from 16.10.2013 to 05.03.2014, respondent no. 2 has in all exported sarees worth Rs. 34,71,344/- through Vikrambhai, owner of M/s. Oswal Overseas to the appellant. 14. By keeping in perspective the ratio in the judgments referred supra and also the well-established position of law under section 482 of the Code, we will examine the crux of the complaint. The responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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