Textile Business Fraud Case – Customer Defaulted on Jacquard Machine Payment After Taking Loan

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by

Adv Sudhir Rao
in

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Textile Business Fraud Case - Customer Defaulted on Jacquard Machine Payment After Taking Loan

Mr.X and his father operated XYZ Textiles in City A. Two years ago, Mr.Y from City B approached them wanting to purchase eight jacquard machines worth Rs. 24 lakhs for his textile unit. After initial discussions, Mr.Y applied for a bank loan to finance the purchase. The machines were delivered based on Mr.Y’s assurance that loan approval was imminent. However, after taking delivery, Mr.Y stopped responding to calls and disappeared. Later investigation revealed that Mr.Y had provided fake documents for the loan application and had no intention of paying. The loan was never approved, leaving Mr.X’s family in serious financial distress with unpaid suppliers and mounting debts.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

  • File immediate police complaint for cheating and criminal breach of trust
  • Gather all transaction records, delivery receipts, and communication evidence
  • Consider civil recovery suit parallel to criminal case for faster monetary relief

Applicable Sections of Law

Under Bharatiya Nyaya Sanhita (BNS), several sections apply to such cases:

  • Section 318 BNS – Cheating by dishonestly inducing delivery of property
  • Section 316 BNS – Criminal breach of trust by taking property and converting it
  • Section 336 BNS – Forgery of documents if fake papers were used
  • Section 61 BNS – Criminal conspiracy if multiple persons were involved

Under Bharatiya Nagarik Suraksha Sanhita (BNSS), investigation and trial procedures would follow prescribed timelines for economic offenses.

If You Are the Complainant

  • File FIR immediately at local police station with complete documentation
  • Prepare chronological timeline of all transactions and communications
  • Collect bank statements, delivery receipts, and any loan application copies
  • Get witnesses statements from employees who handled the transaction
  • File civil suit for recovery with interest and damages simultaneously
Textile Business Fraud Case - Customer Defaulted on Jacquard Machine Payment After Taking Loan

If You Are the Victim

  • Document all financial losses including interest on loans taken for inventory
  • Preserve all communication records including WhatsApp, emails, call logs
  • Get machine valuation done by certified engineers for depreciation claims
  • Maintain records of attempts to contact the accused for settlement
  • Consider asset attachment through court orders if accused owns property

How the Police Behave in Such Cases

Police typically treat business fraud cases seriously, especially when substantial amounts are involved. They may initially try mediation between parties. Investigation includes verification of documents, recording statements of both parties, and technical examination of machines if still in accused’s possession. Economic offense wings handle such cases with specialized investigation techniques including financial trail analysis.

FAQs People Normally Have

Can I get my machines back? Yes, through court orders for asset recovery or criminal court directions during trial.

How long will case take? Criminal cases typically take 2-3 years, but civil recovery can be faster through summary procedures.

What if accused absconds? Court can issue non-bailable warrants and declare them proclaimed offenders.

Can I claim interest and damages? Yes, both in civil and criminal proceedings, including business loss and mental harassment compensation.

Textile Business Fraud Case - Customer Defaulted on Jacquard Machine Payment After Taking Loan

What Evidence Is Required?

  • Original purchase order or agreement documents
  • Delivery challan and transportation receipts
  • Bank statements showing financial transactions
  • Communication records including emails, messages, call recordings
  • Witness statements from employees and transporters
  • Machine specifications and valuation certificates
  • Fake loan documents if available for forgery charges

How Long Will the Investigation Take?

Police investigation typically takes 60-90 days for filing charge sheet under BNSS provisions. However, complex financial frauds involving multiple states may take longer. Court proceedings begin after charge sheet filing. Civil recovery suits can proceed simultaneously and may conclude faster through commercial court procedures.

Advocate Sudhir Rao, Supreme Court of India

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