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IN THE HIGH COURT AT CALCUTTA
BIBHAS RANJAN DE
Pankaj Kumar Agarwal – Appellant
Versus
Panchiram Nahata – Respondent
JUDGMENT :
BIBHAS RANJAN DE, J.
1. The instant revision revolves around an application with a prayer for quashment of proceedings being case no. CN/470/2020 under Sections 420/406/120B of the Indian Penal Code (hereinafter referred to as IPC), presently pending before the Ld. Metropolitan Magistrate, 8th Court, Calcutta.
Backdrop:-
2. The genesis of the impugned proceeding is a complaint made by the opposite party herein against the petitioners before the Court of Ld. Additional Chief Metropolitan Magistrate (for short A.C.M.M). Calcutta alleging inter alia that the opposite party provided a loan of Rs. 15 lacs through RTGS along with interest @ 17% per annum purely on a short term basis i.e. a period of 120 days from October 25, 2011. Thereafter, the said loan was renewed from time to time for a period of 120 days each and upon every renewal fresh cheques were issued and previous cheques were replaced. But on one occasion when the petitioner had issued cheques to the opposite party towards payment of principal amount, the said cheques were returned dishonored with remarks "funds insufficient." Thereafter, on 22.01.2020 when the opposite party demanded the principle amount from the pet
Criminal proceedings under IPC require evidence of mens rea and deception from inception; mere non-payment of loans does not constitute a crime without fraudulent intent.
A breach of contract does not constitute cheating unless fraudulent intent is proven at the outset of the agreement, as established in relevant legal precedents.
Fraudulent intent at the inception of a transaction is essential to establish cheating; mere breach of contract does not constitute a criminal offence.
Point of law : exercise powers under Section 482 CrPC, the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint/FIR/charge-sheet and the High Court....
The court established that allegations of non-payment in a business context do not automatically constitute criminal offences without evidence of fraudulent intent.
The central legal point established in the judgment is that criminal proceedings for offences like criminal breach of trust and cheating should not be initiated in purely civil disputes without fraud....
A breach of contract alone does not constitute cheating; evidence of fraudulent intent is necessary, including manipulation of financed assets which may suggest dishonesty.
The court held that mere non-payment of dues in a commercial transaction does not constitute criminal offences under IPC Sections 406 and 420, emphasizing the distinction between civil and criminal l....
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