In Brief
A company contracted with the Government of Arunachal Pradesh in 1993 to build a hydel power project. Turbines supplied were found defective; the company replaced them in 2000. In 2000, a police complaint was lodged against the company's Managing Director and Director (appellants) alleging cheating and conspiracy. The chargesheet was filed in 2004, but summons only served in 2017. The High Court refused to quash. The Supreme Court held that for cheating charges to stick, fraudulent intention must exist from the transaction's inception. The FIR/chargesheet contained no such specific allegations. Further, absent the company as an accused and without allegations establishing vicarious liability, criminal proceedings against its Directors alone were unwarranted. The Court quashed the proceedings as an abuse of process, setting aside the High Court's order.
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