A commercial dispute cannot be criminalized under IPC sections unless the essential ingredients of the alleged offences are satisfied.

JUDGMENT :

Saurabh Shyam Shamshery, J.

1. Heard learned counsel for the applicants and learned AGA for the State.

2. Present application U/S 482 Cr.P.C. has been filed seeking quashing of the charge-sheet dated 26.12.2017, being C.S. No.708 of 2017 as well as the entire proceedings, arising out of Case Crime No.330 of 2017, in its pursuance as Criminal Case No.834 of 2018, State of U.P. Vs. Arvind Pande and others, under Sections 420, 406, 504, 506 IPC, Police Station Deoband, District Saharanpur.

3. In present matter, the applicant and opposite party had commercial transactions even prior to alleged occurrence, supported by documents placed in present application and not substantially denied by complainant in counter affidavit.

4. The FIR lodged by the complainant was essentially based on a dispute arising out of commercial transaction alleging that though product was received by the applicant but due payment of it was not paid despite repeated reminders. The contents of the FIR are substantially corroborated by the statements of the witnesses recorded during investigation. After investigation, a charge-sheet was filed, on which cognizance was taken and the applicants were summoned by the order dated 27.03.2018 to face trial for an offence under Sections 420, 406, 504, 506 IPC. The statement of the complainant, (Basant Kumar) for reference is reproduced hereinbelow:-

5. Sri Amit Daga and Sri Mangalam Pandey, learned counsels for applicants, vehemently submits that on basis of material available, dispute is essentially arising out of a commercial dispute and complainant has tried it to clock a criminal case, though, dispute was essentially a civil dispute and for that civil remedy was the correct approach. They also submits that on basis of statement of complainant, offence under Section 420, 406, 504, 506 IPC would not made out as neither there was any entrustment nor any cheating nor any alarm was raised nor nature of insult was of such nature that complainant would breach peace.

6. In support of above submissions, learned counsels for the applicants have placed reliance on a recent judgment passed by Apex Court in the case of Lalit Chaturvedi Vs. State of Uttar Pradesh and Another 2024 SCC OnLine SC 171 and relevant paragraph thereof is referred hereinbelow:-

"....5. This Court, in a number of judgments, has pointed out the clear distinction between a civil wrong in the form of breach of contract, non-payment of money or disregard to and violation of the contractual terms; and a criminal offence under Sections 420 and 406 of the IPC. Repeated judgments of this Court, however, are somehow overlooked, and are not being applied and enforced. We will be referring to these judgments. The impugned judgment dismisses the application filed by the appellants under Section 482 of the Cr.P.C. on the ground of delay/laches and also the factum that the chargesheet had been filed on 12.12.2019. This ground and reason is also not valid.

6. In "Mohammed Ibrahim v. State of Bihar", this Court had referred to Section 420 of the IPC, to observe that in order to constitute an offence under the said section, the following ingredients are to be satisfied:—

"18. Let us now examine whether the ingredients of an offence of cheating are made out. The essential ingredients of the offence of "cheating" are as follows:

(i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission;

(ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and

(iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property.

19. To constitute an offence under section 420, there should not only be cheating, but as a consequence of such