Case Note & Summary
The applicants, Mahesh Babulal Mittal (since deceased) and M/s. Narmada Extrusions Limited, filed applications under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of criminal proceedings in C.R. No. RC 2172016E0002 registered by the Central Bureau of Investigation (CBI), Anti Corruption Branch, Mumbai. The charge against the applicants was under Sections 420 and 120-B of the Indian Penal Code, 1860 (IPC) and also under Sections 420 read with 511 IPC. The company manufactured HDPE bags and supplied them to M/s. Rashtriya Chemicals & Fertilizers Ltd. (RCF). The CBI alleged that the company supplied sub-standard bags by packing proper density bags at the top and bottom of each bale and inserting less density bags in the center to avoid detection. During a surprise check at RCF's establishment, this mischief was discovered in 20 bales. The applicants contended that the offence of conspiracy under Section 120-B IPC cannot be sustained against the company alone, as no other person was named as an accused. They also argued that the customers carried out quality checks and made payments only after satisfaction, and as per Clause 11 of the supply terms, rejection was only if sub-standard material exceeded 25%. The CBI submitted that the officers of RCF were also party to the mischief, but no charge was registered against them. The court noted that in the charge-sheet, only the company was shown as an accused, and prior to the death of applicant No.1, there was no other person shown as accused. The court held that the offence of criminal conspiracy under Section 120-B IPC requires at least two persons, and a company cannot be the sole conspirator. Regarding the charge of cheating under Section 420 IPC, the court found that the customers had a quality check mechanism and made payments only after satisfaction, so there was no dishonest inducement or deception. The court also held that the charge of attempt to cheat under Section 511 IPC also fails. Consequently, the court quashed the criminal proceedings against the applicants.
Headnote
A) Criminal Law - Criminal Conspiracy - Section 120-B IPC - Requirement of Two or More Persons - A company cannot be the sole accused for criminal conspiracy as the offence requires at least two persons. Where no other human accused is named, the charge under Section 120-B IPC is not maintainable against the company alone. (Paras 6-7) B) Criminal Law - Cheating - Section 420 IPC - Dishonest Inducement - Where the customer had a quality check mechanism and made payment only after satisfaction, there is no dishonest inducement or deception. The mere supply of sub-standard goods does not constitute cheating if the buyer had the opportunity to inspect and reject. (Paras 4, 7) C) Criminal Law - Attempt to Cheat - Section 511 read with 420 IPC - No Attempt Made Out - When the customer detected the alleged sub-standard bags before payment, there was no deception or inducement. The charge of attempt to cheat also fails as the essential ingredients of cheating are absent. (Para 7)
Issue of Consideration
Whether a company alone can be charged with criminal conspiracy under Section 120-B IPC when no other human accused is named, and whether the ingredients of cheating under Section 420 IPC are made out when the customer had a quality check mechanism and paid only after satisfaction.
Final Decision
The court allowed the applications and quashed the criminal proceedings against the applicants in C.R. No. RC 2172016E0002.
Law Points
- Criminal conspiracy requires at least two persons
- company cannot be sole conspirator
- cheating requires dishonest inducement
- quality check by customer negates deception
