'At Best Deficiency In Service': AP High Court Quashes Cheating FIR Over Supply Of Inferior Quality Oxygen Plant During Covid-19 Pandemic

The Andhra Pradesh High Court quashed cheating FIR against the Chief Executive Officer of a company accused of supplying inferior and substandard quality of oxygen plant during the COVID-19 pandemic, holding that the allegation at best amounts to deficiency in service and would not attract criminal offences.  [2026 LiveLaw (AP) 139]

Before Justice K. Sreenivasa Reddy was a petition filed by the accused under Section 482 of the Code of Criminal Procedure (CrPC), seeking quashing of a charge sheet alleging offences under Sections 406 (criminal breach of trust) and 420 (cheating) IPC.

Observing that the dispute was essentially contractual in nature, the Court said:

"There cannot be any dispute that in order to attract an offence punishable under Section 420 IPC, there must be dishonest intention on the part of the accused from the inception. The allegation against the Petitioner is that she erected the shed and installed an Oxygen plant of inferior/substandard quality in the hospital being run by 2nd respondent /defacto complainant.

If the plant installed is allegedly of inferior or substandard quality, the same would, at best, amount to deficiency in service on the part of the Petitioner. Merely because there is an alleged deficiency in service in supplying or installing the Oxygen plant as per the requirements of Respondent No. 2, the ingredients constituting the offences punishable under Sections 406 and 420 of the IPC would not attract as against the Petitioner. The grievance of the de facto complainant is essentially civil in nature."

According to the prosecution, the complainant, a doctor running a super speciality hospital in Vijayawada, decided to install an oxygen plant during the COVID-19 pandemic. It was alleged that the petitioner, representing herself as the CEO of a private company, induced him to purchase a ZHONGRUI-brand oxygen plant for Rs. 2.10 crore.

After receiving the entire amount, she allegedly failed to complete the project within the stipulated period and ultimately installed a substandard plant that did not conform to the agreed specifications, resulting in registration of the criminal case by the complainant.

The petitioner argued that the oxygen plant had in fact been supplied and installed and that the allegations related only to its quality. She contended that even if the allegations were accepted in their entirety, they disclosed at best a case of deficiency in service arising out of a commercial contract and not the commission of criminal offences.

The State opposed the petition, contending that the petitioner knowingly supplied a substandard oxygen plant and had dishonest intention from the inception of the transaction. It argued that these allegations could only be examined during trial and not in proceedings under Section 482 CrPC.

The Court observed that to attract the offence of cheating under Section 420 IPC, there must be dishonest intention from the very beginning of the transaction. It found that the material on record showed that the petitioner had erected the shed and installed the oxygen plant pursuant to the agreement between the parties and had raised invoices for the work carried out.

The Court also noted that the complainant had already instituted a civil suit concerning the same transaction. Therefore, it held that no dishonest intention could be inferred from the inception and continuation of the criminal proceedings would amount to an abuse of the process of law.

Accordingly, the Court allowed the petition and quashed the criminal proceedings pending before the trial court.

Case Title: Kum. C. Rohini Roy v. State of Andhra Pradesh & Anr.

Case No.: Criminal Petition No. 5209 of 2023

Counsel for the Petitioner: Sri S. Nageswara Reddy

Counsel for the Respondents: Assistant Public Prosecutor for the State; Sri Uday Kumar Vampugadavala for Respondent No. 2

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Citation: 2026 LiveLaw (AP) 139