Madras High Court Refuses To Quash Cheating Case Against Drone Manufacturing Company, Says Sufficient Material To Proceed

Justice P Velmurugan noted that the grounds taken by Ideaforge to quash the case was in the nature of defence which could be decided only at the time of trial. The court also noted that there was prima facie material to proceed with the case. Thus, the court was not inclined to quash the case and dismissed the plea.

“Therefore, a reading of the complaint, FIR, charge sheet and also the statements of the witnesses shows that there are sufficient materials to proceed the case against the petitioners. The grounds taken by the petitioners are nothing but defense which can be decided only after trial and this Court does not find any reason to quash the charge sheet against the petitioners,” the court said.

The case against Ideaforge was that it had approached the defacto complainant, Garuda Aerospace to sell its new drone RYNO (Q4i-Micro) IAV. Garuda Aerospace expressed their interest and placed an order for 15 drones and made full payment for the same in compliance with the agreed terms. A cumulative payment of Rs. 2,20,67,050 was paid by the defacto complainant.

While so, it was alleged that on June 2023, without any prior notice or justified reason, Ideaforge virtually locked and disabled the purchased UAVs/Drones by disabling the essential software making them non-functional and incapable of being commissioner for their intended activities. The defacto complainant argued that due to this, the company's project with the Government of Odisah was also affected compelling the Government to blacklist the company for the loss.

Garuda also submitted that though a legal notice was sent to Ideforge, the company, in its reply threatened to initiate false proceedings against Garuda thus prompting Garuda to lodge a complaint based on which the FIR was registered. The charge sheet was registered for offences under Sections 409 and 420 of IPC along with Sections 43, 65, and 66 of the Information Technology Act.

While seeking to quash the case, Ideaforge submitted that there was no prima facie against it. It was submitted that Section 409, was wrongly applied to the case as the petitioners were neither public servants nor bankers, merchants, factors, brokers, attorneys, or agents of Garuda. It was further argued that as per Section 420 of the IPC, a person should have cheated or dishonestly induced a person to deliver any property or to make, alter, or destroy the whole or any part of valuable security. It was submitted that in the present case, there was no allegation that would attract the ingredients of Section 420.

Similarly, it was argued that Section 43 of the IT Act was also wrongly invoked. Ideaforge submitted that it was the sole owner of the software used to operate the drones and had the right to deactivate the license key of the drones. It was submitted that Section 43 would be attracted only when the owner or person in charge is denied access but in the present case, Ideaforge itself being the owner and person in charge, Section 43 would be inapplicable.

It was also argued that the dispute was civil in nature as the defacto complainant had violated the terms of purchase. Thus, Ideaforge argued that the complaint was an abuse of process of law which should be quashed by the Court invoking powers under Section 482 of CrPC.

The court was however not inclined to quash the proceedings and gave liberty to Ideaforge to raise the defences at the time of trial.

Counsel for the Petitioner: Mr. Satish Maneshinde Senior Counsel for Mr. Kumarpal R. Chopra

Counsel for the Respondent: Mr. A. Gokulakrishnan Additional Public Prosecutor and Mr. S. Sugendran Additional Public Prosecutor, Mr. V. Karthic Senior Advocate for M/s. A. Ashwin Kumar

Case Title: M/s. Ideaforge Technology Limited v. The State of Tamil Nadu

Citation: 2025 LiveLaw (Mad) 61

Case No: Crl. O. P.No.7091 of 2024