Legal Provisions Involved: Sections 406 (Criminal Breach of Trust) and 420 (Cheating) of the Indian Penal Code, 1860; Section 482 of the Code of Criminal Procedure, 1973
Judgement by: High Court at Calcutta
Judge/Bench: Justice Ajay Kumar Gupta
Facts
The petitioner operated a poultry feed business and had a long-standing commercial relationship with the opposite party since 2012. During 2013–2014, transactions worth Rs. 1,02,22,252/- occurred, with payments made regularly through cash, cheque, and bank transfers. The supplier filed a police complaint in November 2016, alleging Rs. 40 lakhs were due and that the petitioner had cheated him.
Key Legal Provisions Involved
Section 406 of the Indian Penal Code, 1860, Section 420 of the Indian Penal Code, 1860 and Section 482 of the Criminal Procedure Code, 1973.
Issues raised
- Whether the alleged dispute was civil or criminal in nature.
- Whether the essential ingredients of cheating (Section 420) and criminal breach of trust (Section 406) were established.
Arguments
It was submitted by the Appellant that the transactions were purely commercial in nature, any outstanding dues should be recovered through civil proceedings, not criminal complaints. Further, the Respondent submitted that business transactions continued over a long period, and dues remained unpaid despite assurances.
Judgement
The Court allowed the revision petition and quashed the criminal proceedings. The Court held that there was no evidence of dishonest or fraudulent intention at inception of the transaction. Even assuming outstanding dues existed, this would give rise to a civil dispute, not criminal liability. Continuing criminal proceedings would amount to abuse of the process of law.
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