A consumer dispute over product performance cannot constitute cheating absent fraudulent intent at inception.

The opposite party purchased a “Maruti Suzuki Celerio ZXI MT” from Dewars Garage Limited, Kolkata, on or about 28.09.2022 for approximately ₹6,17,469.

After driving the vehicle for nearly three months and over 5,000 kilometres, he alleged that its electronic power steering did not automatically return to the central position after a turn.

The vehicle was inspected during servicing, and the manufacturer’s Regional Service Manager informed him that it was functioning according to specifications and that the return-assist feature was not available in that model.

The opposite party thereafter instituted C.S. No. 37758 of 2024 under Sections 120B, 418 and 420 of the IPC against the manufacturer, its officials and the dealer.

The Magistrate took cognizance, examined witnesses and issued summons, finding a prima facie case.

The manufacturer and its CEO/official invoked Section 482 Cr.P.C. seeking quashing of the proceedings, contending that the dispute was essentially consumer-related and that the complaint disclosed no criminal intent or specific role on their part.

1. Whether the complaint, taken at face value, disclosed the essential ingredients of cheating under Sections 418 and 420 IPC, including dishonest or fraudulent intention at the inception of the transaction.

2. Whether the allegations disclosed a criminal conspiracy under Section 120B IPC between the manufacturer, its officials and the dealer.

3. Whether the dispute was essentially one concerning the quality, features or performance of a consumer product, for which criminal proceedings could not be used as a substitute for consumer or civil remedies.

4. Whether the CEO/official of the manufacturer could be prosecuted in the absence of specific allegations of personal participation or a statutory basis for vicarious criminal liability.

5. Whether non-compliance with the inquiry contemplated under Section 202(1) Cr.P.C., where the accused persons were residing outside the Magistrate’s territorial jurisdiction, constituted an additional ground for quashing.

The Court applied Section 482 Cr.P.C. to prevent abuse of the process of court where the uncontroverted allegations do not disclose the commission of an offence.

Sections 415 and 420 IPC require deception and dishonest or fraudulent inducement existing from the inception of the transaction; subsequent dissatisfaction with the quality or performance of goods does not, by itself, constitute cheating.

Section 418 IPC requires cheating coupled with a legal or contractual obligation to protect the complainant’s interests and a dishonest intention to cause wrongful loss.

Section 120B IPC requires an agreement or meeting of minds to commit an illegal act; conspiracy cannot be inferred merely because several persons are arrayed as accused.

Criminal liability is not vicarious merely because an individual holds a senior corporate position, absent statutory authorization or specific allegations of active participation.

The Court relied, inter alia, on Pepsi Foods Ltd. v. Special Judicial Magistrate concerning the serious nature of summoning and the Magistrate’s duty to apply judicial mind.

The Court relied, inter alia, on Ford India Ltd. v. Sunbeam Ancillary Pvt. Ltd., which held that a complaint concerning defective goods, without the ingredients of cheating, may be quashed where the appropriate remedy lies under consumer law.

The Court further treated compliance with Section 202(1) Cr.P.C. as mandatory before issuance of process against accused residing beyond the Magistrate’s jurisdiction.

The Court found that the complaint was founded entirely on the alleged absence of automatic steering return in the vehicle.

The opposite party had purchased the car without a test drive and used it extensively before raising the grievance.

The brochure merely described the vehicle as having “Electric Power Steering” and contained no representation that it possessed a return-assist feature or any specified degree of steering returnability.

Thus, the complaint did not establish that the petitioners had made a false representation or had dishonest intent at the time of sale, defeating the foundational requirements of Sections 418 and 420 IPC.

The manufacturer and dealer had also inspected the vehicle and furnished a technical explanation, which was inconsistent with an inference of deliberate deception.

No specific facts suggested an agreement or meeting of minds constituting conspiracy under Section 120B IPC.

The dispute was therefore characterised as one concerning product features, alleged manufacturing defect, deficiency in service or unfair trade practice, matters falling within the consumer-law framework; the pendency of the opposite party’s consumer case reinforced that conclusion.

Further, no overt act, representation, participation in the sale or personal involvement was attributed to the CEO/official, and the Magistrate had not undertaken the requisite Section 202 inquiry before issuing process to persons residing outside the jurisdiction.

The proceedings in C.S. No. 37758 of 2024 and all orders passed therein were quashed and set aside insofar as the petitioners were concerned.

C.R.R. No. 2314 of 2024 was accordingly allowed, connected applications were disposed of, and a copy of the judgment was directed to be sent to the trial court.