A breach of contract does not constitute the offence of cheating unless there is evidence of fraudulent or dishonest intention at the initial stage of the transaction. Criminal proceedings cannot be utilized as a tool for debt recovery in strictly civil or commercial disputes.

JUDGMENT :

ANIL KUMAR CHOUDHARY, J.

Heard the parties.

2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with the prayer to quash the entire criminal proceedings including the order dated 01.09.2018 passed by the learned Judicial Magistrate, Giridih in connection with Complaint Case No. 1326 of 2017 whereby and where under the learned Judicial Magistrate, Giridih has found sufficient material to proceed against the petitioners for having committed the offences punishable under Sections 420 and 120B of the Indian Penal Code.

3. The allegations against the petitioners are that the petitioners, being the directors of M/s Sydler Packs; which is a company incorporated under the Companies Act, took some articles from the complainant worth Rs.63,76,368/- but paid only Rs.30,48,293/- and did not pay the remaining amount; by way of cheating. On the basis of the complaint, the statement of the complainant under solemn affirmation and the statement of the inquiry witnesses, the learned Judicial Magistrate, Giridih has passed the summoning order as already indicated above.

4. Learned counsel for the petitioners draws attention of this Court towards I.A. No. 3917 of 2026 and submits that the matter was sent for mediation and the petitioners have paid the entire amount of Rs.24,00,000/- in installments to the company of the complainant after filing of this case. It is next submitted that this interlocutory application is only supported by the affidavit of the petitioners but the informant has not signed the same.

5. Learned counsel for the petitioners relies upon the judgment of this Court in the case of Ranjit Ganpat Chougule @ Ranjit Chougule & Another vs. The State of Jharkhand & Another and allied case reported in 2025:JHHC:23641 and submits that therein, this Court relied upon the judgment of the Hon’ble Supreme Court of India in the case of Anand Kumar Mohatta & Another vs. State (NCT of Delhi), Department of Home & Another reported in (2019) 11 SCC 706, para-27 of which reads as under:-

“27. We find it strange that the complainant has not made any attempt for the recovery of the money of rupees one crore except by filing this criminal complaint. This action appears to be mala fide and unsustainable.”

and submits that if a person is entitled to get some money from the accused person of the case but did not file any civil proceeding for recovery of the same but only files a criminal case, such action appears to be mala fide.

6. Learned counsel for the petitioners next submits that in that case, this Court also relied upon the judgment of the Hon’ble Supreme Court of India in the case of Vesa Holdings Private Limited vs. State of Kerala & Ors. reported in (2015) 8 SCC 283, para-12 of which reads as under:-

“12. From the decisions cited by the appellant, the settled proposition of law is that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the