Supreme Court

Naresh Kumar and Ors. Vs. The State of Karnataka and Ors. (Neutral Citation: 2024 INSC 196)

MANU/SC/0193/2024

12.03.2024

Criminal

Mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case

The Appellants before present Court have challenged the order of the High Court by which their petition under Section 482 of Code of Criminal Procedure, 1973 (CrPC) for quashing the FIR has been dismissed. The case of the Appellants before the High Court was that, the FIR which was instituted by the complainant i.e. Respondent No. 2 is primarily a civil dispute and has no criminal element and the entire criminal proceedings initiated against the Appellants is nothing but an abuse of the process and consequently, they had invoked the extraordinary powers of the High Court under Section 482 of the CrPC.

The dispute between the parties is primarily, civil in nature. It is after all a question of how many bicycles the complainant had assembled and the dispute between the parties is only regarding the figure of bicycles and consequently of the amount liable to be paid. This is a civil dispute. The complainant has not been able to establish that the intention to cheat the complainant was there with the Appellants right from the beginning.

In the case of Paramjeet Batra v. State of Uttarakhand, this Court recognized that, although the inherent powers of a High Court under Section 482 of the Code of Criminal Procedure should be exercised sparingly, yet the High Court must not hesitate in quashing such criminal proceedings which are essentially of a civil nature.

Essentially, the present dispute between the parties relates to a breach of contract. A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case, as held by this Court in Sarabjit Kaur v. State of Punjab and Anr. Similarly, dealing with the distinction between the offence of cheating and a mere breach of contractual obligations, this Court, in Vesa Holdings (P) Ltd. v. State of Kerala, has held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the Accused had fraudulent or dishonest intention at the time of making the promise.

In the case at hand, the dispute between the parties was not only essentially of a civil nature but in this case the dispute itself stood settled later. There is no criminal element here and consequently the case here is nothing but an abuse of the process. The order of the High Court is set aside. Appeal allowed.

Tags : Civil dispute FIR Quashing of

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