1998 Supreme(Pat) 365
PATNA HIGH COURT
Narayan Roy, J.
Ram Prakash Mathur, Alias Ladlay Mathur
Versus
State Of Bihar
Criminal Miscellaneous No. 6012 of 1991 ;
Decided On : MAY 4, 1998
A breach of contract, without any dishonest or fraudulent intention, does not constitute a criminal wrong and cannot give rise to criminal prosecution.
Headnote:
CRIMINAL LAW - QUASHING OF COGNIZANCE - SECTIONS 420 AND 406 OF THE INDIAN PENAL CODE - BREACH OF CONTRACT - CIVIL LIABILITY - NO CRIMINAL WRONG - COGNIZANCE QUASHED.
Fact of the Case:
The complainant filed a complaint against the petitioner alleging that the petitioner had taken Rs. 60,000 from him for the distribution rights of a film, but failed to deliver the print of the film on time, causing him financial loss.
Finding of the Court:
The court found that the complaint petition disclosed a case of breach of contract and not a criminal wrong, as the petitioner had eventually handed over the print of the film to the complainant and there was no evidence of dishonest or fraudulent intention on the part of the petitioner.
Issues: Whether the facts alleged in the complaint petition constituted a criminal wrong or a civil liability.
Ratio Decidendi: The court held that a mere breach of contract does not give rise to criminal prosecution, and that the complainant's remedy lay in a civil suit for damages.
Final Decision: The court allowed the petitioner's application and quashed the order taking cognizance of the offences under Sections 420 and 406 of the Indian Penal Code.
Narayan Roy, J.
1. I have heard the learned Counsel for the parties.
2. By this application, the petitioner has prayed for quashing the order taking cognizance dated 17-8-1990 for offences under Secs. 420 and 406 of the Indian Penal Code. It appears that opposite party No.2 filed a complaint in the Court of the Chief Judicial Magistrate, Gaya, stating therein, inter alia, that the petitioner had telephoned the complainant informing him that he had acquired the distribution right of picture Santosh in the State of Bihar. He had assured the complainant on telephone that he needed Rs. 60,000.00 for releasing that picture and he would definitely hand over the print to him on 3-3-1989 for exhibition on 21-2-1989, all the accused persons, including the petitioner, came to Gaya at the residence of the complainant where a contract was concluded in between the accused persons and the Complainant, and the complainant paid Rs. 40,000.00 by a demand draft and also paid Rs. 20,000.00 in cash. After payment of the amount aforesaid, the complainant insisted for handing over the print of the film Sanlosh but somehow or the other the accused persons went on making false excuse and ultimately the petitioner could get the print of that picture with great difficulty on 3-11-1989, and the show was exhibited upto 11-11-1989. The complainant, therefore, prayed before the learned Chief Judicial Magistrate to take cognizance of the offence as the accused persons did not pay the amount and since the complainant had suffered loss as he could not realise the entire amount from the exhibition of the show.
3. Pursuant to the complaint aforesaid, the complainant was examined on solemn affirmation and after due inquiry the cognizance of the offence was taken against the accused persons, including the petitioner, for offences under Secs. 420 and 406 of the Indian Penal Code, and processes were issued against them. One of the accused persons, namely, the petitioner, consequently thereafter filed the present application.
4. Learned Counsel for the petitioner submitted that on reading of the complaint petition, it is manifestly clear that it was a case of quo contract and since the complainant had already exhibited the film Santosh as per the terms of the contract, it is not a case of criminal wrong and out and out it is a case of civil dispute.
5. Learned Counsel for the complainant opposite party No. 2 on the contrary, submitted that, since there was entrustment of Rs. 60,000.00 to the accused, it was a clear case of criminal breach of, trust and the entire amount was not refunded to the complainant.
6. I have perused the complaint petition. From the complaint petition, it appears that, on the basis of the concluded contract, the accused persons had agreed to hand over the print of the film Santosh and the complainant, accordingly, advanced Rs. 60,000.00 to them. Further it appears from the complaint petition that the picture Santosh somehow or the other was made available to the complainant and the same was exhibited in the cinema hall for some time. On seeing the accusation levelled against the petitioner and other accused persons and also seeing the facts alleged therein, it appears to me that at best it is a case of breach of the contract and since the film was already handed over to the complainant, no offence whatsoever is made out under Sec. 420 Of the Indian Penal Code, More so, pursuant to the contract, since the film was handed over to the complainant, it also cannot be said to be a case of criminal breach of trust. On reading of the complaint petition as a whole, therefore, it appears to me that in no way it is a case of criminal wrong and out and out it is a case of civil liability.
7. In the facts and circumstances of this case, therefore, I am of the opinion that no case has been made out either under Sec. 420 or under Sec. 406 of the Indian Penal Code. Even assuming, primafacie, that all the allegations in the complaint are accepted to b