KUNSTOCOM ELECTRONICS I PVT LIMITED Vs. GILT PACK LIMITED
SUPREME COURT OF INDIA (FROM: MADHYA PRADESH)
(M/S.) Kunstocom Electronics (I) Pvt. Ltd.
Gilt Pack Ltd. And Another
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P. Venkatarama Reddi, J. -
(1.)Leave granted and the appeal heard on merits.
(2.)The respondent herein filed a private complaint in the Court of Chief Judicial Magistrate, Indore, alleging that the appellant committed an offence of cheating in relation to a transaction of supply of 1500 mt. tons of 'polypropylene brastec' which is a raw material required for manufacture of HDPE/PP bags. In January, 1994 the respondent-Company placed orders on a German Company named M/s. Kunstoplast Chemic GMBH. . . . . . . for the supply of 1500 mt. tons of polypropylene brastec through the media of the appellant in accordance with the price and terms specified in two indents. According to the appellant, it is a business agent of the German Company, though according to the respondent, the appellant claimed to be a representative and associate of the German Company. Pursuant to the deal, an irrevocable letter of credit was opened in favour of the German Company covering the value of entire quantity of 1500 mt. tons. Out of that quantity, only 50 MTs. were shipped on 9-3-1994 and the letter of credit was encashed to that extent. The remaining quantity which was expected to be supplied as per the contract was not shipped and the correspondence and personal talks with the appellant did not evoke any positive response. Finally, on 29-4-1994, the appellant-company informed the respondent that the remaining 1450 mt. tons cannot be shipped due to some unforeseen circumstances. The appellant requested that the L.C. may be treated as cancelled. As a result of non-fulfilment of obligation under the contract, it is claimed by the respondent that it suffered a loss of $ 2,36,250/- on account of escalation of prices. It is the case of the complainant that on account of rise in prices during the interregnum, the appellant and the German company deliberately failed to honour the commitment in order to profit themselves at the expense of the respondent. It is alleged that the deceptive intention of the accused from the beginning could be gathered from the initial representations and the subsequent conduct. According to the respondent-complainant, the appellant was trying to gain time on one pretext or the other right from the date of opening the letter of credit in furtherance of its criminal intention to cheat. The complainant also alleged that it was induced to believe by the representation of the appellant that the entire quantity would be supplied within the stipulated period on receipt of irrevocable letter of credit and on the strength of this representation, the contract was entered into.
(3.)The appellant's case is that even going by the contents of the complaint and the statements of the witnesses recorded by the learned Magistrate, no offence of cheating is made out and it is purely a case of breach of contract arising out of non-supply of remaining quantity of goods. According to the appellant, there was no fraudulent or dishonest intention at the time of entering into the contract nor any deception practised on the contracting party (complainant). It is also averred that the police before whom the complaint was referred to under S. 156(3), Cr. P.C. submitted a report that no offence of cheating was made out.
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