International Advanced Research Center Vs. Nimra Cerglass Technics
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Head Note
Indian Penal Code,1860 - Section 420
Cheating - Breach of Contract - Distinction - It would depend upon the intention of the accused at the time of alleged inducement - If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal and the accused is guilty of the offence of cheating - If all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a civil court - Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction.
Indian Penal Code,1860 - Section 420
Cheating - Essential ingredients to attract Section 420 IPC are: (i) cheating; (ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security and (iii) mens rea of the accused at the time of making the inducement - Making of a false representation is one of the essential ingredients to constitute the offence of cheating under Section 420 IPC - In order to bring a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but, it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant.
The Code of Criminal Procedure, 1973 - Section 482 , Indian Penal Code,1860 - Section 420
Inherent Power - Quashing of Prosecution - Respondent No. 1-NIMRA first approached ARCI for co-operation and received money from ARCI for developing part of the technology - Finally NIMRA opted for developing part of the technology by itself rather than jointly transfer to a third party as provided for in 1997 agreement - No dishonest intention could be attributed to the appellants as is apparent from the fact that NIMRA earlier had collaboration with ARCI and ARCI put in sufficient efforts by conducting repeated performance guarantee tests - By analysis of terms and conditions of the agreement between the parties, the dispute between the parties appears to be purely of civil nature -As per the terms of the technology transfer agreement, ARCI has to conduct performance guarantee tests and in those tests when ARCI was unsuccessful in achieving the targeted specifications, ARCI cannot be said to have acted with dishonest intention to cheat the respondent - Allegations in the complaint do not constitute the offence alleged and continuation of the criminal proceeding is not just and proper and in the interest of the justice, the same is liable to be quashed.
The Code of Criminal Procedure, 1973 - Section 482
Inherent Power - Quashing of Prosecution - Held that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is, as to whether uncontroverted allegations as made in the complaint establish the offence - High Court being superior court of the State should refrain from analyzing the materials which are yet to be adduced and seen in their true perspective - Inherent jurisdiction of the High Court under Section 482 Cr.P.C. should not be exercised to stifle a legitimate prosecution and is to be used sparingly only in rare cases.
The Code of Criminal Procedure, 1973 - Section 482
Inherent Power - Quashing of Prosecution - While exercising inherent jurisdiction under Section 482 Cr.P.C., it is not for the High Court to appreciate the evidence and its truthfulness or sufficiency inasmuch as it is the function of the trial court - High Court's inherent powers, be it, civil or criminal matters, is designed to achieve a salutary public purpose and that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution - If the averments in the complaint do not constitute an offence, the court would be justified in quashing the proceedings in the interest of justice.
Topic(s)-Cheating - Breach of Contract - Distinction , Cheating - Essential ingredients to attract Section 420 IPC