Hemant Kanoria 4 Others vs State Of A.P. Rep., By ITS PP Another

The petitioners are A1 to A5 in Cr.No.163 of 2012 of Begumpet Police Station, Hyderabad on the complaint lodged by the deceased/2nd respondent, which was referred to Begumpet Police Station for the purpose of investigation.

The case of the complainant is that he entered into hypothecation loan agreement with A1 for purchase of TATA JD 315V Back Hoe Loader from Kolkata, for which A6 (not petitioner) was the mediator and distributor of M/s.SREI Equipment Finance Pvt. Limited.

It was advertised by A6 that the said vehicle was fuel efficient and would earn income. Believing said advertisement, the complainant purchased two vehicles for Rs.42.00 lakhs and finance was arranged by A6 through 1st petitioner/A1. The advertisement was made by A6 to promote his business and stated falsely about the fuel efficiency of the vehicles. However, the said vehicles were consuming 15 liters of diesel per hour, though A6 stated that the vehicles would consume only 5 liters of diesel per hour.

It is further alleged that after taking delivery of two vehicles, the complainant maintained for a period of six months and returned the said vehicles on 08.03.2009 and obtained acknowledgment. The complainant was cheated as under-performing vehicles were sold to him. In respect of the said transaction, the complainant incurred loss of Rs.10 lakhs. However, the company represented by A1 has filed Section 138 of Negotiable Instruments act case against the complainant for not paying the amount spite of taking back the vehicles and issuing No Due Certificate.

The case of the complainant is that two vehicles which were purchased by taking finance from the company/A-1 through A6, consumed three times the fuel per hour. Though A6 stated that the vehicles would consume 5 liters per hour, the vehicles were consuming 15 liters of diesel per hour.

Counsel for petitioner argued that the 1st petitioner/A1 had given finance for purchase of the vehicles. It cannot be said that there is any kind of inducement that is made by these petitioners, to attract an offence under Sections 406 and 409 of IPC. Further the question of impersonation in this case does not arise, for which reason, an offence under Section 419 of IPC is also not attracted. Thus, when the petitioner company is financing purchase of vehicles, it cannot be said that providing finance to the complainant in any manner would amount to cheating. If the grievance of the complaint is that the vehicles were consuming more fuel than promised, it is for the complainant either to move the consumer forum or to prosecute the manufacturer of the vehicles for giving under- performing vehicles. Ultimately, the vehicles are machines and their fuel efficiency would depend upon the usage.

A private complaint was filed by the 2nd respondent before the XI Additional Chief Metropolitan Magistrate, Secunderabad. It was endorsed by the learned Magistrate that the allegations in the complaint require thorough investigation by the police, for which reason the same was forwarded to the SHO, Begumpet for investigation. The learned Magistrate ought to have narrated and referred to the facts of the case which require thorough investigation in the order. Only allegation in the entire complaint is that the vehicles which were purchased were not fuel efficient as stated by A6. In the said circumstances, the learned Magistrate failed to apply his mind before referring the case to the police for the purpose of investigation.

In the facts of the present case, the petitioners who have provided finance for purchasing the vehicles cannot in any manner be mulcted with criminal liability for the offence under Sections 406, 409, 419 and 420 of IPC to permit continuation of criminal proceedings. Accordingly, Criminal Petition No.1007 of 2013 is allowed and proceedings against A1 to A5/petitioners in Cr.No.163 of 2012 are hereby quashed.

Coming to the facts of the case in Crl.P.No.15713 of 2014 in FIR No.351 of 2014, this Court by order dated 18.02.2013 stayed the proceedings in Cr.No.163 of 2012, which is the subject matter in Crl.Petition No.1007 of 2013. Subsequent to granting Stay, another complaint was filed on 27.08.2014 against the petitioners stating that two vehicles i.e, TATA JD 325 were purchased after taking loan from the company, wherein the 1st petitioner was the Managing Director and 2nd petitioner was employee of M/s.SREI Equipment Finance Pvt.Limited. As stated above, the facts of the case are same as in Crime 163/2012, which was stayed by this Court.

No where in the said complaint, the 2nd respondent/complainant has mentioned that he has previously filed the said complaint which was registered by the Begumpet Police vide Cr.No.163 of 2012. The said complaint is nothing but twisted reproduction of the very same facts, which are subject matter of FIR No.163 of 2012 of PS Begumpet. For the reasons discussed above, while quashing the FIR No.163 of 2012, present complaint also fails to make out any of the offence of cheating and misappropriation punishable under Sections 420 and 406 of IPC. There are no allegations to attract criminal conspiracy. The transaction is clearly purchase, sale and financing. Admittedly, the petitioner company financed the 2nd respondent/complainant for purchasing vehicles, which were returned on the ground that they were not fuel efficient. In the said circumstances, there are no reasons to permit continuation of investigation, in the facts and circumstances of the present case.

In the result, Criminal Petition No.15713 of 2014 is allowed and the proceedings against petitioners in Cr.No.341 of 2014 on the file of Humayun Nagar PS are also hereby quashed.

Accordingly, both the Criminal Petitions are allowed.