Criminal proceedings regarding contract disputes cannot be used to recover debts unless dishonest intent at the inception of the transaction is proven. Furthermore, company directors cannot be held liable without specific, evidence-backed allegations of their direct personal participation in the alleged wrongdoing.

JUDGMENT :

Partha Sarathi Chatterjee, J.

1. The present application has been filed by the petitioners, namely, Karuna Greentech Pvt. Ltd. and its 3 (three) Directors, under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “the Code”), seeking quashing of the proceeding arising out of C.R. Case No. 417 of 2022 under Sections 406/420 of the IPC, presently pending before the learned Judicial Magistrate, 1st Court at Siliguri, as well as all orders passed therein.

2. The record would reveal that on 08.03.2022, the O.P. filed a complaint under Section 200 of the Code before the Court of the learned Additional Chief Judicial Magistrate at Siliguri, inter alia, alleging therein that petitioner no. 1 Company deals in the “Nordusk Light Division” through its Directors, namely, petitioner nos. 2 to 4 herein. It was further alleged that, upon being approached by the representatives of petitioner no. 1 Company, the O.P. Company was appointed as a “Super Stockist” or “Prime Partner” for the Siliguri and adjoining North Bengal region for distribution of LED lighting products marketed under the brand “Nordusk.”

3. The dispute leading to the filing of the complaint originated from a commercial arrangement entered into in or about December, 2017, pursuant to which the petitioners allegedly induced the O.P. to purchase stock/goods worth Rs. 15,42,398/-. The structure of the said arrangement envisaged that the petitioners would provide all sorts of support, including necessary marketing, sales promotion, appointment of distributors, and collection support.

4. However, ultimately, no such support was extended to the O.P. Despite several reminders, conferences, and phone calls, the petitioners allegedly agreed to repurchase the unsold stock/goods and, accordingly, the O.P. dispatched the unsold stock worth Rs. 9,86,011/-. However, despite receipt of the said unsold stock, the petitioners neglected to pay the aforesaid amount. The O.P. also issued a legal notice claiming the said amount along with damages of Rs. 1 (one) lakh and interest accrued thereon at the rate of 18% per annum. However, the said amounts have not yet been paid. Hence, the complaint.

5. The record would further reveal that on 08.03.2022, cognizance was taken and the case was made over to the Court of the learned Judicial Magistrate, 1st Court at Siliguri for disposal. By an order dated 11.04.2022, the transferee Court called for a report from the Inspector-in-Charge of Siliguri Police Station to conduct an investigation and submit a police report indicating whether any prima facie case was made out against the accused persons, namely, the petitioners herein, for commission of the alleged offences punishable under Sections 406/420 of the IPC.

6. On 07.09.2022, upon perusal of the police report, the learned Court came to the conclusion that a prima facie case had been made out against the accused persons, namely, the petitioners herein, for commission of the alleged offences and, accordingly, process under Section 204 of the Code was issued against them. Upon receipt of the summons, the petitioners filed the present application.

7. Mr. Biswas, learned advocate appearing for the petitioners, while arguing on facts claimed that the O.P., being a relatively new player in the market, had been in