Calcutta HC Quashes Truck Buyer’s Case Against Dealer MD Over Chassis Allegedly Sold As 2013 Models, Citing No Specific Role

The complainant purchased two Tata LP chassis in 2013 through a transaction involving French Motor Car Company Limited, whose Managing Director was the petitioner.

The complainant alleged that he had been led to believe the chassis were manufactured in 2013, but later learned they were manufactured in 2011; he also complained of missing accessories and poor performance.

The petitioner admitted the vehicles were manufactured in 2011 but maintained that the complainant knew this, received a substantial discount, and was refunded for the shortfall in tyres.

A complaint under Section 156(3) of the Code of Criminal Procedure led to an FIR and prosecution under Sections 420, 406, 465, 467, 468 and 120B of the Indian Penal Code.

The petitioner sought quashing of the proceeding against him.

Under State of Haryana v. Bhajan Lal, the High Court may quash a criminal proceeding where, taking the allegations at face value, they do not disclose an offence against the accused; the power must be exercised sparingly and without conducting a mini-trial.

Under Hridaya Ranjan Prasad Verma v. State of Bihar, cheating requires dishonest or fraudulent intention at the time of inducement; subsequent breach alone is insufficient.

Indian Oil Corporation v. NEPC India Ltd. cautions against converting a commercial dispute into criminal proceedings absent the ingredients of an offence.

Under S.K. Alagh v. State of Uttar Pradesh and Sunil Bharti Mittal v. Central Bureau of Investigation, a director or Managing Director is not vicariously liable under the IPC merely by virtue of office; prosecution requires material showing individual participation and the requisite criminal intent, unless a statute provides otherwise.

Sections 405–406 IPC require entrustment or dominion over property and dishonest misappropriation or conversion; Sections 465, 467 and 468 require the statutory elements of forgery, including the making or use of a false document.

The Court treated the petitioner’s assertions about the complainant’s knowledge, the discount and the refund as disputed defences that could not be resolved at the quashing stage.

It nevertheless found that the materials, as described, did not specifically show that the petitioner misrepresented the vehicles’ manufacturing year, dishonestly induced payment, misappropriated entrusted property, forged or used a false document, or joined a conspiracy.

The alleged shortfall in accessories and vehicle-performance complaints, without the necessary statutory ingredients, did not by themselves establish criminal breach of trust or forgery.

The petitioner’s position as Managing Director and his association with the transaction were insufficient, without specific material of personal participation and criminal intent, to sustain prosecution against him.

It quashed the criminal proceeding against the petitioner and allowed the revision to that extent; proceedings against the other accused, if any, were left unaffected.