Criminal proceedings are not a shortcut for civil remedies, and fraudulent or dishonest intention at the beginning of a transaction is necessary to establish cheating.

JUDGMENT

Rajesh Shankar, J. - The present criminal miscellaneous petition has been filed for quashing the entire criminal proceeding arising out of C/1 Case No.860 of 2009 including the order dated 29.04.2009 passed by the Judicial Magistrate, 1st Class, Jamshedpur, whereby the cognizance of the offence under Section 420 of the Indian Penal Code has been taken against the petitioner.

2. One complaint case being C/1 Case No. 860 of 2009 has been filed by the opposite party No.2 stating that the complainant/opposite party No.2 is engaged in the business of manufacturing, sale and supply of various P.V.C pipes, plastic containers etc. It supplied various products to the petitioner for an amount of Rs.37,77,794/- and the petitioner paid a sum of Rs.34,41,156/- keeping Rs.3,36,638/- due. The petitioner assured that the said due amount shall be paid later on, however, he did not keep the said promise. The complainant issued legal notice to the petitioner which was replied on 14.08.2008 assuring payment of the dues on furnishing the statement of accounts. Thereafter, the opposite party No.2 through its lawyer, sent the statement of accounts to the accused/petitioner, but he failed to make payment of the said due amount.

3. The learned counsel for the petitioner submits that the petitioner being the Director of the Company-M/s. Arun Distributors Pvt. Ltd. cannot be made solely responsible for violation of the terms of the contract in a criminal proceeding as he is not responsible for the day to day affairs of the Company. It is further submitted that in view of the fact that the dispute is of civil nature, any proceeding arising out of the present complaint case is an abuse of the process of law. The petitioner had no intention to cheat the opposite party No.2 at any point of time and, therefore, the petitioner cannot be allowed to be prosecuted in the present criminal case. The learned court below while taking cognizance of the offence under Section 420 of the Indian Penal Code did not apply its judicial mind, rather cognizance has been taken against the petitioner in a mechanical manner. It is further submitted that the statement of accounts given by the opposite party No.2 is not correct and it requires further correction.

4. The learned counsel for the opposite party No.2 submits that the complaint specifically discloses the alleged offence which has not been denied by the petitioner and as such the present criminal proceeding need not be quashed. It is a settled position of law that the mere fact that a complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegation in the complaint discloses a criminal offence or not.

5. Heard the learned counsel for the parties and perused the materials available on record. The thrust of the argument of the learned counsel for the petitioner is that the present dispute is purely civil in nature for which no criminal culpability is attracted.

6. In support of the said contention, the learned counsel for the petitioner puts reliance on the judgment of the Hon''ble Supreme Court rendered in the case of Vir Prakash Sharma v. Anil Kumar Agarwal & Anr., (2007) 7 SCC 373 , in which it has been held as under:-

"8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus:

"405. Criminal breach of trust.- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly use