The court ruled that mere contractual disputes do not constitute criminal offenses, and criminal proceedings cannot be used as substitutes for civil remedies.

ORDER :

J. Sreenivasa Rao, J.

This Criminal Petition has been filed seeking to quash the proceedings in C.C. No. 641 of 2023 on the file of the III Additional Junior Civil Judge-cum-XIV Additional Metropolitan Magistrate, Medchal-Malkajgiri District, wherein the petitioners have been arrayed as accused Nos. 1 and 2 for the offences punishable under Sections 420, 504, and 506 read with Section 34 of the Indian Penal Code, 1860.

2. When this matter was taken up for consideration on 31.10.2023, there was no representation on behalf of respondent No. 2. Subsequently, the matter again came up for hearing on 29.07.2025. On that date also, there was no representation on behalf of respondent No. 2. Once again, the matter came up for hearing on 25.10.2025. On that day also, there was no representation on behalf of respondent No.2 either virtually or physically, and the learned counsel for the petitioners was heard. However, in order to give one more opportunity to respondent No. 2, the matter was posted to 03.11.2025 under the caption ‘For Orders’. Despite the matter being listed under the said caption, even today there is no representation on behalf of respondent No. 2. Hence, this Court has no option except to proceed with the matter on merits.

3. Heard Sri Baglekar Akash Kumar, learned counsel for the petitioners, and Sri M. Vivekananda Reddy, learned Assistant Public Prosecutor appearing on behalf of respondent No. 1.

4. The case of the prosecution, in brief, is that the de-facto complainant alleged that in June 2022, he approached accused Nos. 1 and 2, seeking a security contract. It is alleged that they demanded Rs.50,000/-, of which Rs.30,000/- was paid in cash on 26.08.2022, and the balance amount of Rs.20,000/- was subsequently paid through PhonePe. Despite receiving the total amount, the accused failed to allot the contract and kept postponing it. On 05.01.2023, when the complainant sought a refund, the accused allegedly abused and threatened him with dire consequences.

5. Learned counsel for the petitioners submits that the petitioners have not committed any offence and have been falsely implicated in the present case. Even if the allegations made in the complaint and the charge sheet are read together, the essential ingredients of the offences under Sections 420, 504, and 506 read with Section 34 of the Indian Penal Code, 1860, are not attracted. The only allegation made in the complaint is that the petitioners failed to provide security agency contract work to respondent No. 2 despite having received an amount of Rs. 50,000/-. The aforesaid allegations are purely civil in nature, arising out of a contractual dispute. If respondent No. 2 was aggrieved, he ought to have approached the competent Civil Court seeking enforcement of the contract. Instead, he has invoked criminal proceedings, which is impermissible in law. It is further submitted that the Investigating Officer, without conducting a proper investigation, has filed the final report reiterating the very same allegations made by respondent No. 2 in the complaint. Hence, the continuation of the proceedings against the petitioners amounts to a clear abuse of the process of law. In support of his contention, learned counsel for the petitioners have relied upon the principles laid down by the Hon’ble Apex Court in V.P.Shrivastava v. Indian Explosives Limited and others , [(2010) 10 SCC 361] and Vikram Johar v. State of Uttar Pradesh and Another , [ (2019) 14 SCC 207 ] .

6. Per contra, learned Assistant Public Prosecutor submits that the petitioners, with a dishonest intention, received the amount from respondent No. 2 and failed either t