A breach of contract is primarily a civil dispute and does not attract criminal liability under Sections 406 and 420 of the IPC unless dishonest intention is proven from the inception or property was specifically entrusted.

::ORDER::

1. This Criminal Petition is filed by the petitioners – accused Nos.1 to 3 seeking to quash the proceedings in C.C.No.5944 of 2022 on the file of the learned XXXII Additional Metropolitan Magistrate, Cyberabad at Kukatpally, for the offences under Sections 406, 420 and 503 read with Section 34 of the Indian Penal Code (for short ‘IPC’).

2. The case of the complainant is that the complainant is working with CCMB (Centre for Cellular and Molecular Biology) in the development of a communication platform for autistic children using disruptive technologies like artificial intelligence and data analytics. That accused No. 1 happens to be the Chairman of Radharam Marketing Pvt. Ltd., and accused No. 2 is the founder of Radharam Marketing Pvt. Ltd., and is the key person in carrying out the day-to-day operations of their business, while accused No. 3 is the Head of Operations of Radharam Marketing Pvt. Ltd., and is aiding and advising accused Nos. 1 and 2 in the conduct of business. All the three accused, while approaching the complainant, represented that their business is running through a large network over the years and that they have enough experience in emerging technologies. They requested the complainant to develop and provide them an e-commerce inventory platform for their business in FMCG products.

3. An agreement was entered into between both the parties on 20.06.2021. Further, a supplementary agreement, terming it as Software as a Service (SaaS), was also executed between the parties on 20.08.2021. However, the most crucial Business Requirement Document (BRD) was not furnished, without which the assigned project could not have been executed. Despite many requests and emails, the accused failed to furnish the same, and it is the complainant who had taken the ordeal of preparing the BRD for RRM to develop the IMS (Inventory Management System) application. The accused have convinced the complainant to take Rs. 30 lakhs in white and Rs. 35 lakhs in cash, to which the complainant was reluctant. Thus, the complainant submits that two other agreements were entered into for “development of e-commerce inventory platform” and “mutual confidentiality and non-disclosure agreement.” As seen from the terms, there was consensus ad idem as to what is the area and scope of the agreement that has to be carried on. That on account of time constraints, the complainant took an internal call for rollout of the modules (there were more than 10 modules in the product) using one of the very reputed modules and by securing an open-source platform, which is universally accepted in the e-commerce industry.

4. The accused did not indicate anywhere in writing via emails or during the meetings that they were employing one Mr. Venkateswara Rao as their technical SPOC (Single Point of Contact). Surprisingly, the said Venkateswara Rao, leaving aside all business ethics, started poaching one of the consultants of the complainant, namely Mr. Anudeep, who had been engaged to oversee the ad hoc requirements coming from RRM, to handle them without disturbing the actual development, and tried to support the business activities through the temporary provision mentioned above. Thus, the said Venkateswara Rao polluted the minds of the accused with baseless allegations, saying that the project does not cost Rs. 65 lakhs and that it can be completed within Rs. 10 lakhs. Thus, in spite of the best efforts made by the complainant to convince the accused, by sho