Back
2010 Supreme(Cal) 1114
HIGH COURT OF CALCUTTA
SYAMAL KANTI CHAKRABARTI, J.
Sangeeta Upadhyay - Appellant
Versus
State Of West Bengal – Respondent
Appeal No : C.R.R. No. 3385 of 2009 AND C.R.A.N. No. 2210 of 2010
Decided On : Sep 02, 2010
Sekhar Basu, Milon Mukherjee, Sandipan Ganguly, Rana Mukherji, Rudradipta Nandy, Tirthankar Ghosh, Satadru Lahiri, S.S.Roy
Headnote:
CRIMINAL BREACH OF TRUST - CHEATING - CONTRACTUAL DISPUTE - QUASHING OF PROCEEDINGS - IPC, SECTIONS 406, 420, 120B - CRPC, SECTIONS 2(D), 156(3), 200, 202, 203, 482 - Where a dispute arises from a commercial transaction and involves allegations of breach of contract, the appropriate remedy lies in a civil court rather than a criminal prosecution. The mere failure to pay the balance amount due under a contract does not amount to cheating or criminal breach of trust. In such cases, the continuation of criminal proceedings would amount to an abuse of the process of law and should be quashed.
Fact of the Case:
The petitioners, who were directors and consultants of a company, were accused of cheating and criminal breach of trust by a private limited company that had supplied and installed a solar water heating system at their premises. The complainant company alleged that the accused had placed an order for the system, made an advance payment, and assured that the balance would be paid on receipt of the materials. However, after the materials were supplied, the accused refused to make the balance payment and ultimately cancelled the work order.
Finding of the Court:
The court found that the dispute between the parties was purely civil in nature and that there was no prima facie evidence to suggest that the accused had any intention to deceive or cheat the complainant company from the very inception of the contract. The court noted that the complainant company had failed to complete the work order as per the agreed terms and had instead demanded the entire value of the goods supplied without regard for commissioning the system within a reasonable time.
Issues: 1. Whether the dispute between the parties was purely civil in nature or involved criminal elements. 2. Whether there was sufficient evidence to suggest that the accused had the intention to deceive or cheat the complainant company from the inception of the contract. 3. Whether the continuation of criminal proceedings in such a case would amount to an abuse of the process of law.
Ratio Decidendi: 1. The court held that the dispute between the parties was purely civil in nature as it arose from a commercial transaction and involved allegations of breach of contract. 2. The court found that there was no prima facie evidence to suggest that the accused had the intention to deceive or cheat the complainant company from the inception of the contract. The court noted that the accused had made an advance payment and had assured that the balance would be paid on receipt of the materials. 3. The court held that the continuation of criminal proceedings in such a case would amount to an abuse of the process of law, as the appropriate remedy for a breach of contract lies in a civil court.
Final Decision: The court quashed the criminal proceedings against the petitioners, holding that the dispute was purely civil in nature and that there was no prima facie evidence to suggest that the accused had the intention to deceive or cheat the complainant company from the inception of the contract. The court further held that the continuation of criminal proceedings in such a case would amount to an abuse of the process of law.
Syamal Kanti Chakrabarti, J.
1. SOME common questions are involved in both these revisional applications, which are accordingly taken up for consideration together. The petitioners in both these revisional applications have prayed for quashing of the proceedings being Case No. C-14761 of 2009 along with order dated 5.6.2009 passed therein which is now pending before the 8th Court of Learned Metropolitan Magistrate, Kolkata. It is contended that at the instance of O.P. no. 2, the aforesaid complaint case was instituted on the allegation that the complainant is a Private Limited Company and O.P. no. 2 is a manufacturer of Solar Water Heater. Accused no. 1 is a Director of the accused company and the petitioner is purportedly the Chairman of the said company and the accused no. 3 is the Consultant of the accused company and all of them are looking after the day-today business of the accused company. The accused in the letter dated 20.5.2008 placed an order with the complainant company for supply and installation of British Consol Make 6500 Litres per day evacuated Tube Collector based Solar Water Heating System for Jacuzzi Sauna Treatment etc. for Health Spa. The officers of the O.P. no. 2 company stated to the accused persons that the said water heating system shall have to be manufactured and installed as per the specification and order placed by the accused persons and the total cost would be about Rs. 13,00,000/-. The O.P. no. 2 company accordingly asked for an advance of Rs. 3,61,616/- out of the total price of the same and accused assured that payment of the balance would be made by them immediately on receipt of supply of the materials as per the purchase order dated 20.5.2008. On the basis of such assurance of the accused persons, O.P. no. 2 company started manufacturing the said water heating system as per the Map and specification given by the accused persons in respect of the roof plan with dimension for installation of the Solar Panel System, which is to be installed at 16, Raja Santosh Road, Kolkata. As per such specification, the O.P. no. 2 manufactured the requisite materials and supplied various equipments valued at Rs. 11,41,500/-. The O.P. no. 2 company requested the accused persons to make balance payment in respect of the goods supplied to them to the tune of Rs. 7,79,884/- and also informed that the remaining goods as per order of the accused persons were ready for delivery but the accused persons did not pay the said sum of Rs. 7,79,884/- and ultimately refused to make such payment. Thus, it is alleged by the O.P. no. 2 that the accused persons made a criminal conspiracy and in furtherance of such conspiracy and criminal design by their false and fraudulent representations intentionally deceived the O.P. no. 2 and other persons of the company and dishonestly induced the O.P. no. 2 company to supply them goods and materials worth Rs. 11,41,500/- against initial payment of only Rs. 3,61,616/- and refused to make balance payment and thus, committed an offence punishable under Sections 120B/406/420 of the Indian Penal Code.
2. ON receipt of such complaint, the Learned Chief Metropolitan Magistrate, Kolkata, by his order dated 30.3.2009 took cognizance of the offence and transferred this case to the file of the Learned Metropolitan Magistrate, 8th Court, Kolkata for disposal. ON receipt of such record by transfer, Learned Court below examined the authorized representative of the O.P. no. 2 and directed Officer-in-Charge, Bowbazar Police Station to investigate into the allegations as per the provisions of Section 202 of Cr.P.C. In the meantime, the O.P. no. 2 has also filed an application under Sections 93/94 of the Cr.P.C. ON receipt of the police report, Learned Magistrate has been pleased to hold that a prima facie case under Sections 406/420/120B of the I.P.C. has been made out against the accused persons including the petitioners herein and directed to issue search warrant but refused the prayer made b
