In Brief
A company director and managing director were charged with cheating under Section 420 IPC for supplying sub-standard turbines to a state government's hydro-power project. The Supreme Court quashed the proceedings, holding that cheating requires proof of fraudulent intent at the transaction's inception. The FIR contained no such allegations. Moreover, without the company itself being arrayed as accused or specific vicarious liability allegations, proceedings against the directors alone were untenable. The project had functioned since 1996, defects were promptly replaced, and the department had certified satisfaction, negating any criminal intent. The 13-year delay in prosecution also constituted abuse of process.
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