Case Note & Summary
The applicant, Sumeet Kishor Nandeshwar, a businessman running a partnership firm named M/s. UN Multitech Engineers and Contractors, entered into an agreement with respondent no.2, Yogesh Jayant Mamidwar, on 19.9.2016 for construction of PEB sheds. The agreement contained several conditions and was signed by both parties. Due to changes made by respondent no.2, the applicant was not allowed to start work at the site. Subsequently, respondent no.2 sent an email cancelling the agreement without prior intimation. The applicant learned that respondent no.2 was not agreeable to the increased material prices and had himself cancelled the contract. On 16.3.2017, respondent no.2 lodged a false report at Police Station Ramnagar, Chandrapur, resulting in registration of FIR Crime No.550 of 2017 for offence punishable under Section 406 of the Indian Penal Code (criminal breach of trust). The applicant filed the present criminal application seeking quashing of the FIR. The court heard the learned counsel for both parties. The court examined the ingredients of Section 406 IPC, which requires entrustment of property and dishonest misappropriation or conversion. The court found that the dispute between the parties was purely civil in nature, arising from a breach of contract regarding construction work and price revision. There was no entrustment of any property by the respondent to the applicant, nor any dishonest misappropriation. The mere fact that the respondent had paid some advance amount did not constitute criminal breach of trust. The court held that the FIR did not disclose any criminal offence and was an abuse of the process of law. Consequently, the court allowed the application and quashed the FIR.
Headnote
A) Criminal Law - Criminal Breach of Trust - Section 406 Indian Penal Code, 1860 - Quashing of FIR - Dispute arose from a construction agreement where the respondent cancelled the contract and alleged that the applicant did not return the advance amount - Court held that the dispute is purely civil in nature and does not satisfy the ingredients of criminal breach of trust as there was no entrustment of property or dishonest misappropriation - Held that FIR liable to be quashed (Paras 1-4).
Issue of Consideration
Whether the allegations in the FIR constitute an offence under Section 406 of the Indian Penal Code, 1860 or are purely of a civil nature.
Final Decision
The court allowed the criminal application and quashed the FIR Crime No.550 of 2017 registered at Police Station Ramnagar, Chandrapur for offence under Section 406 IPC.
Law Points
- Criminal breach of trust requires entrustment of property and dishonest misappropriation
- mere breach of contract does not attract Section 406 IPC
- civil disputes cannot be criminalized
