Civil liability cannot be converted into criminal liability using criminal prosecution as an instrument to pressure settlement of business disputes.

ORDER

This Criminal Original Petition has been filed seeking to quash the FIR registered in Crime No.35 of 2023 on the file of the first respondent.

2. Heard the learned counsel appearing for the petitioner and the learned Government Advocate (Crl.Side) appearing for the first respondent. Though notice has been served on the second respondent, none appeared on behalf of the second respondent either in person or through pleader. Perused the materials available on record.

3. The case of the prosecution is that the second respondent/defacto complainant viz., VSV Agencies, was engaged in the business of supplying pulses and food grains. According to the prosecution, pursuant to the purchase order placed by the accused during February 2022, the second respondent supplied urad dhal worth about Rs.2,64,46,000/- to A1 to A4. Though the accused initially repaid a part sum, there was a balance of Rs.1,45,96,000/-. Despite repeated request made by the second respondent for the settlement of the outstanding amount, the accused failed to repay the same. During February 2023, A1 paid part payment of Rs.10 lakhs in cash and issued two cheques for the balance amount, out of which, one cheque came to be dishonoured. Thereafter, during May 2023, A3 and A4 criminally intimidated and threatened the second respondent for having stopped further supply of goods. Hence, the complaint.

4. On receipt of the complaint, the first respondent registered FIR in Crime No.35 of 2023 for the offences punishable under Sections 120(B), 409, 420, 294(b) and 506(i) of IPC.

5. A perusal of the records reveals that it is a business transaction between the accused and the second respondent. Even according to the second respondent, pursuant to the purchase order, urad dal was supplied to the accused and a sum of Rs.1,45,96,000/- remains as the outstanding balance payable by the accused. Therefore, if at all any amount is due and payable, the second respondent ought to have approached the Civil Court for appropriate relief for recovery of money based on the purchase order and the invoice raised thereunder.

6. Perusal of the entire allegations made in the FIR reveals that even according to the second respondent, the entire allegations are related to money transactions between them. Therefore, the criminal prosecution is used as an instrument to harass the petitioner and as such, the present FIR has been registered with an ulterior motive and it cannot be sustained as against the petitioner.

7. It is relevant to rely upon the judgment made by the Honourable Supreme Court of India in the case of M/s. Indian Oil Corporation Vs. NEPC India Limited and others [(2006) 6 SCC 736], held that the civil liability cannot be converted into criminal liability and it is necessary to take notice of a growing tendency in business circle to convert purely civil dispute in criminal case. This is obviously on account of prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lender/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claim which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and dishonoured.

8. In the case of G.Sagar Suri Vs. State of Uttar Pradesh [2000 (2)

SCC 636], the Honourable Supreme Court of India held as follows:-

“It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence, criminal proceedings are not a short cut of other remedies available