Case Note & Summary
The petitioner, Nilesh Daulatrao Lakhani, proprietor of Lakhani Enterprises, filed a criminal writ petition under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the order dated 20.10.2011 passed by the Judicial Magistrate, First Class at Shirala in R.C.C. No.100/2011, whereby process was issued against him under Sections 406, 420, 422, 403 and 464 of the Indian Penal Code. The respondent-complainant, Yashwant Sahakari Glucose Karkhana Ltd., had filed a complaint on 26.2.2009 alleging that the petitioner had purchased molasses from the complainant but failed to pay the full price, and that the petitioner had issued a cheque which was dishonoured. The Magistrate initially directed the complainant to give statement on oath, and later on 22.7.2010 ordered investigation under Section 156(3) CrPC. Pursuant to this, Crime No.4/2010 was registered at Shirala Police Station on 30.7.2010. The petitioner approached the Sessions Court for anticipatory bail, which was rejected, but the High Court granted pre-arrest bail on 25.8.2011, observing that the matter appeared to be a pure and simple civil dispute for recovery of balance amount. After investigation, charge-sheet was filed on 10.10.2011, and on 20.10.2011 the Magistrate issued process. The petitioner then filed the present writ petition. The court considered the submissions of both sides and examined the complaint and charge-sheet. The court found that the transaction was purely commercial, involving supply of molasses and non-payment of price. The court noted that the High Court while granting anticipatory bail had already observed that it was a civil matter. The court held that no criminal intent was made out and the dispute was purely civil in nature. The court quashed the criminal proceedings to prevent abuse of process of law. The petition was allowed, and the rule was made absolute.
Headnote
A) Criminal Law - Quashing of Criminal Proceedings - Abuse of Process of Court - Sections 406, 420, 422, 403, 464 IPC read with Section 482 CrPC - The petitioner sought quashing of criminal proceedings initiated by the respondent-complainant for alleged offences of criminal breach of trust, cheating, and forgery arising from a commercial transaction for supply of molasses. The court held that the dispute was purely civil in nature, being a recovery of balance amount for goods supplied, and no criminal intent was made out. The proceedings were quashed to prevent abuse of process of court. (Paras 1-10) B) Criminal Law - Anticipatory Bail - Observation of Civil Nature - Section 438 CrPC - The High Court while granting anticipatory bail had observed that the matter was a pure and simple civil dispute for recovery of balance amount. This observation was noted by the court while quashing the proceedings. (Paras 4-5) C) Criminal Procedure Code - Quashing of FIR - Inherent Powers - Section 482 CrPC - The court exercised its inherent powers under Section 482 CrPC to quash the criminal proceedings as the continuation would be an abuse of process of law. (Para 10)
Issue of Consideration
Whether criminal proceedings under Sections 406, 420, 422, 403, 464 IPC can be sustained when the dispute is purely civil in nature regarding non-payment of price for goods supplied.
Final Decision
The petition is allowed. The order dated 20.10.2011 passed by the Judicial Magistrate, First Class at Shirala in R.C.C. No.100/2011 issuing process against the petitioner under Sections 406, 420, 422, 403 and 464 of IPC is quashed and set aside. The criminal proceedings are quashed. Rule is made absolute.
Law Points
- Civil dispute cannot be converted into criminal offence
- Criminal proceedings can be quashed if dispute is purely civil
- Section 482 CrPC allows quashing of criminal proceedings to prevent abuse of process
