How to prove cheating since inception or from signing of the agreement?

Tilak Marg Forum for Legal Questions Forums Criminal Law How to prove cheating since inception or from signing of the agreement?


This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 10 months ago.

  • Author
  • #3707

    Ritz .

    Dear sir,
    Hope this email finds you in good health!

    It is connection with your article titled “Breach of contract will not be cheating unless deception played at the very inception” posted on your website dated October 7, 2015. I would be grateful indeed if you bring more clarity on the subject keeping in mind the background of my case, mentioned hereunder:

    It all started when my company, which is a Private Ltd. signed a co-packing agreement with a Limited company to supply certain products in our brand.

    It is clearly written in the agreement that the “purchase price agreed therein includes all charges, i.e. raw material, packaging charges and so on…and the vendor (accused Ltd. company) shall raise invoice after supply of each consignment and the customer shall be liable to make payment within a period of 7 days from the date of such invoice.”

    On the basis of the signed agreement, we raised a Purchase Order to the vendor (accused Ltd. company) to supply the products. Vendor (accused Ltd. company) acknowledged the PO. But when they (accused Ltd. company) were supposed to deliver the products as mentioned in the PO, they demanded some advance payment through text message which was the sheer violation of the signed agreement.

    We raised objections and requested the vendor (accused Ltd. company) to honour the terms of the agreement and asked them to deliver the products. Instead of delivering the products, Vendor (accused Ltd. company) through email imposed more harsher advance payment terms violating the signed contract.

    Since we were in huge loss due to non-supply of products, so continued to negotiate with the vendor (accused Ltd. company). On the other hand, vendor kept on demanding advance payment. Finally, we through an email canceled the Purchase Order, as per the clause of the agreement.

    Meanwhile, Vendors (accused Ltd. company) senior management came for a meeting and promised that they can supply in smaller volume and customer will have to pay 50% advance payments against the Performa Invoice (PI). It was also agreed in a MEETING that the we will give post-dated cheques as an “assured payment” against the packaging material which the vendor (accused Ltd. company) procured in preparation for the first purchase order that they did not honour.

    Vendor raised PI and we made payment via bank transfer to supply the smaller volume as mentioned in PI. When the Vendor (accused Ltd. company) did not acknowledge the payment, we enquired about it. On which, the Vendor informed that THEY HAVE ADJUSTED THE PAYMENT AGAINST THE PACKAGING MATERIAL PROCURED.

    In fact, it was the vendor (accused Ltd. company) who demanded advance and did not honour the terms of the agreement. In this case, how can they adjust the payment UNILATERALLY, which was actually transferred for the supply of smaller volume as mentioned in the PI?

    The concerned police station did not register FIR and the MM concerned has rejected the complaint u/s 156 of Cr. P.C. How can we proceed in this case now? We are in distress, sir.

    Though, we have invoked arbitration as per the arbitration clause mentioned in the agreement. But, how can the honourable court fixed the inducement/cheating and breach of agreement that the vendor has done with us, as it is the subject matter of criminal court? Second, How can we prove that the deception played at the very inception?

    Please suggest. And, if possible, cite some case laws which can be helpful in our case in issuing notice to the vendor (accused Ltd. company). I will be indebted to you, sir.

    Yours sincerely,
    An uncalled victim!
    Email ID:

  • #3708

    Once the police station as well as the Magistrate have both rejected your complaint under Section 420 IPC, it implies that they do not find any offence of cheating committed in the transaction and that they consider it to be a civil matter arising out of dispute under the terms of the contract / agreement. So, in their view, it is not a question of deception being from beginning or from a later stage, on the other hand, they appear to be of the view that there is no cheating or deception at all.

    On the face of it, it appears to be a civil matter and not a criminal matter. However, one may need to examine the relevant documents in detail to come to a final conclusion as to whether an offence of cheating is made out. You should consult some good local lawyer and show him all the relevant documents. If it appears that an offence of cheating is made out, you may have to challenge the order of the Magistrate before the higher courts. However, if it seen that there is no offence made out in the transaction, you should file a civil suit before the appropriate court to resolve your dispute. These appear to be the only possible remedies in your case.


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.

You must be logged in to reply to this topic.

You may also like to read these topics:

What is punishment in case under Sections 324 325 and 506 r/w 34 IPC?
Can accused get bail from Supreme Court immediately after its rejection by High Court?
Section 420 IPC - can fake assessment order of tax lead to cheating?
Section 337 IPC - untrained doctor performing minor surgery on leg and damaging

Facebook Comments