The distinction between a breach of contract and a criminal offence under Section 420 requires proof of dishonest intent, which was not established in this case.

1. This application under S.482 of Cr.P.C has been filed for quashing the FIR in Crime No.112 of 2015 registered by PS Kotwali District Datia for the offences punishable under S.420 of IPC.

2. Applicant no.1 is the Government of India Undertaking and the applicant no.2 is Director (Civil) and applicant no.3 is Project Director Pichhore Dinara - Datia project, TCIL Bhawan, New Delhi and applicant no.4 is the Accounts Officer, Pichhore Dinara - Datia Project, TCIL Bhawan, New Delhi and they are officials of applicant no.1. Hence, the applicants no.2 to 4 are the employees of Government of India Undertaking. The respondent no.3 is the complainant who had filed criminal complaint against the applicants.

3. The applicant no.1 Telecommunication Consultants India Ltd. Company is a company registered under the provisions of Companies Act , 1956 having it's registered office at Greater Kailash Part 1, New Delhi. It is Central Government owned undertaking and is engaged in the business of providing telecommunication and allied services including services related to monitoring of networking systems and related solutions.

4. It is submitted by the applicants that during the ordinary course of it's business, the applicant no.1 had submitted it's bid in response to NIT dated 5.12.2006 issued by the Madhya Pradesh Road Development Corporation by which, the bids were invited for contractual work for upgradation, rehabilitation and strengthening of Pichhore - Dinara - Datia road project and Datia - Seondha Road project. The contract for the work of Pichhore - Dinara - Datia Road Project was issued in favour of applicant no.1 and one Sunil Trading Co. Ltd. was appointed by the applicant no.1 as a sub contractor and an agreement was executed between applicant no.1 and Madhya Pradesh Road Development Corporation on 26.3.2007. Thereafter, an agreement was executed between applicant no.1 and Sunil Trading Company through its Partner Pawan Jain on 10.4.2007. As per Art.13 of the agreement, the applicant no.1 was to take risk policy. Art.13 of the agreement dated 10.4.2007 reads as under:
"TCIL shall take contractors all risk policy for the period of construction and deduct 0.7% of the contract value from the running bills of the agency towards premium";

5. According to the agreement an arbitration clause was provided which is Art.17.4 which reads as under:
"If any dispute or difference arises between TCIL and the agency in relation to or in connection with this agreement, either party may give notice to the other party of the existence of such dispute or difference. Such dispute shall be referred to arbitration of CMD, TCIL, who shall appoint the arbitrator. The award given by the arbitrator shall be final and binding on both the parties. Provisions of the Indian Arbitration and Conciliation Act , 1996 shall be applicable. The venue of arbitration shall be New Delhi Notwithstanding any of the provisions of this agreement the performance of the agency shall continue during such arbitration proceedings".

6. It was submitted by counsel for the applicants that accordingly, the respondent no.3 proceeded to take up the contractual work.

7. It is submitted by counsel for the applicants that in compliance of Art.13 of the agreement dated 13.4.2007, a policy No. 221800/46/07/39/00000006 was obtained by the applicant no.1 from United India Insurance Co.Ltd for the period from 1.4.2007 till 31.3.2008. A copy of the policy has been placed on record as Annexure P / 6. Thereafter, letter dated 27.2.2008 was written by the United India Insurance Company Ltd to the applicant no.1 informing the requirement of renewal of policy no. 221800/46/07/39/00000006 which was issued on 31.3.2008. It is submitted by counsel for the applicants that accordingly, the applicant no.1 by letter dated 31.3.2008 paid the premium amount by cheque and accordingly, a new policy No. 221800/46/08/39/00000002 was issued by the United India Insurance Company Ltd. It is further submitted th