A mere breach of contract does not constitute a criminal offense unless fraudulent intent is established, warranting anticipatory bail.

The Court made the following Order:

This Criminal Petition is filed by Petitioners/Accused Nos.1, 3 and 4 under Section 482 of the BNSS seeking anticipatory bail in Crime No.575 of 2020 of Dachepalli Police Station, Guntur District, registered for the offences punishable under sections 420 323 and 506 read with 34 of IPC .

2. The case for the prosecution, in brief, is that on 18.10.2020 at about 11:00 a.m., the de facto complainant filed a report before the police stating that he and one Ravindra Babu had been conducting a chill business. For the last three years, A1 had been purchasing chills from the de facto complainant but had not paid the amount. The de facto complainant called the accused to Kesanapalli village to settle the issue before the village elders. The accused agreed to pay the money, but did not do so. Subsequently, the de facto complainant approached the Superintendent of Police through the Spandana Cell, Guntur Rural. Thereafter, all the accused went to the de facto complainant and stated that they did not intend to pay the money and threatened to kill him.

3. Heard. Perused the material on record.

4. Learned counsel for the petitioners submits that the defacto complainant had lodged a report against the petitioners based on a business transaction held between A1 and the defacto complainant. Though the crime was registered in the year 2020, now the police are making threat of arrest of the petitioners. The transaction as per the report of the defacto complainant is purely civil in nature and the penal provisions will not apply.

5. Learned Assistant Public Prosecutor representing the Respondent-State, opposed the grant of bail to the petitioners on the ground that the investigation is not completed.

6. On perusal of the material on record goes to show that A1 and defacto complainant used to deal with chill business transactions and A1 became due for an amount of Rs.9,00,000/- and subsequently a mediation was held in the presence of mediators. It seems that A1 could not pay the amount and the case is registered against the wife of A1 who is arrayed as A4 and his clerk A3 in the present crime. As seen from the allegations in the First Information Report, A3 and A4 allegedly threatened the defacto complainant and it seems that they have nothing to do with the chill business transactions held between A1 and the defacto complainant.

7. In Naresh Kumar and Another V. State of Karnataka and Another , 2024 SCC OnLine SC 268 , the Hon’ble Supreme Court held that:

8. Essentially, the present dispute between the parties relates to a breach of contract. A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case, as held by this Court in Sarabjit Kaur v. State of Punjab , (2023) 5 SCC 360 . Similarly, dealing with the distinction between the offence of cheating and a mere breach of contractual obligations, this Court, in Vesa Holdings (P) Ltd. v. State of Kerala, (2015) 8 SCC 293 , has held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the accused had fraudulent or dishonest intention at the time of making the promise.

In light of the decision cited above and circumstances of the case, this Court finds that it is difficult to appreciate the applicability of Section 420 IPC to the acts attributed against A3 and A4. As seen from the record, the crime came to be registered based on the transaction held in between A1 and the defacto complainant, as the A1 failed to pay the amounts to the defacto complainant.

8. Given the facts and circumstances of the case coupled with the prima facie analysis of the nature of allegations, this Court views that even if the petitioners are granted pre-arrest bail, there cannot be any apprehension for the prosecution that they will tamper with the evidence. The material placed on record discloses that the petitioners have a permanent abode. It is not the prosecution's case that t