Report No. 29

Appendix 24

Substandard Goods and Cheating

The point for consideration is whether, where a person has supplied goods of inferior quality, or goods which are not according to specification, or of lesser quantity than stipulated, his act comes within the scope of section 420, Indian Penal Code.

(1) There is only one reported Indian case in which the matter seems to have been directly dealt with1. The facts were these. The accused contracted to deliver to Rau Brothers 260 "dokras" of fully good, machine-ginned cotton. In pursuance of this contract, the accused delivered 260 "dokras" largely composed of cotton-seed, kapas and rubbish, carefully packed into the middle of the dokras, while all around the sides was placed good ginned cotton. The admixture of inferior stuff was found in all the "dokras", and it varied from 6 to 15 per cent against the quantity of 1/2 or 11/2 which might be expected ordinarily to be found in dokras. It was held, that the accused was guilty of the offence of cheating under section 420 of the Penal Code.

(2) Of course, the general rule is2 that a mere breach of contract cannot give rise to a criminal prosecution. The distinction between a case of mere breach of contract and one of cheating depends upon the intention of the accused at the time of the alleged inducement, which may be judged by subsequent acts; but the subsequent act is not the sole criterion of this intention4. Where there is no clear and conclusive evidence of the criminal intention of the accused at the time the offence is said to have been committed and where the party said to be aggrieved has an alternative remedy in a civil court, the matter should not be allowed to be fought in the criminal courts3.

(3) As has been held4, the representation can be implied from conduct5.

7. Emp. v. Kanji Shivaji, (1912) 14 Bom LR 137: 14 IC 669 (Chandavarkar and Batchelor JJ).

2. Sheosagar v. Emp., (1936) 37 Cr ij 38 (Pat HC) (Fazl. Ali J.) (Money taken for arranging marriage).

3. See AIR 1959 Tripura 38.

4. Khoda Bux v. Boheya Mindari, ILR 32 Cal 941 (947) (Pargiter and Woodroffe JJ.).

5. Cf the facts in M.A. Kolesh v. Emp., AIR 1927 Mad 544.