Case Note & Summary
The petitioner, Mahesh Shantilal Parekh, 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 FIR No. 37 of 2013 registered at Marine Drive Police Station for offences under Sections 406 and 420 of the Indian Penal Code, 1860, and the consequent criminal case pending before the Metropolitan Magistrate, 47th Court, Esplanade, Mumbai. The respondent No. 2, Pramod Girdharilal Lath, a businessman running a company called 'New World Resources' engaged in selling polymer raw material, alleged that from February 2012 to September 2012, he supplied polymer raw material to the petitioner's company 'Shreeji Trade Corporation' from a godown at Bhiwandi. It was alleged that the petitioner purchased raw material from time to time and paid consideration until May 2012, but thereafter failed to pay for supplies made between June and September 2012, resulting in an outstanding amount. The petitioner argued that the dispute was purely civil in nature, as there was no dishonest intention at the time of the transaction and no entrustment of property. The respondent No. 2 opposed the petition, submitting that the material gathered was sufficient for the petitioner to face trial. The court, after considering rival submissions and perusing the record, held that the allegations did not make out a prima facie case for criminal breach of trust or cheating. The court noted that the relationship was that of buyer and seller, and the failure to pay for goods supplied, without any initial dishonest intention, is a civil breach of contract. The court quashed the FIR and the criminal proceedings, allowing the petition.
Headnote
A) Criminal Law - Quashing of FIR - Civil vs. Criminal Dispute - Sections 406, 420 IPC - The court considered whether failure to pay for goods supplied amounts to criminal breach of trust or cheating. Held that the dispute is purely civil in nature, as there was no dishonest intention at the inception and no entrustment of property; the relationship was that of buyer and seller, not trustee and beneficiary. (Paras 5-7) B) Criminal Procedure Code - Inherent Powers - Section 482 CrPC - Quashing of Criminal Proceedings - The court exercised its inherent powers under Section 482 CrPC read with Article 226 of the Constitution to quash the FIR and criminal proceedings, as the allegations did not disclose any criminal offence and the matter was essentially a civil dispute. (Paras 2, 7)
Issue of Consideration
Whether the allegations in the FIR and the material collected during investigation make out a prima facie case for offences under Sections 406 and 420 of the Indian Penal Code, 1860, or whether the dispute is purely civil in nature warranting quashing of the FIR.
Final Decision
The petition is allowed. FIR No. 37 of 2013 registered at Marine Drive Police Station and the consequent criminal case pending before the Metropolitan Magistrate, 47th Court, Esplanade, Mumbai are quashed.
Law Points
- Civil dispute not criminal
- breach of contract
- no dishonest intention
- no entrustment
- quashing of FIR
- Section 482 CrPC
- Article 226 Constitution
