SUMAN K SHRIVASTAVA
Ranchi, March 21: The Jharkhand High Court has once again found rampant criminalization of civil disputes and quashed two FIRs in the last one week, saying purely civil disputes cannot be converted into criminal cases.
The first case is related to the order dated 07.05.2019 passed by a Jamshedpur court whereby summons had been issued against M/s Mideast Integrated Steels Ltd. (MESCO Steel Ltd.) after finding a prima facie case under Sections 420, 406 & 120B of the Indian Penal Code.
The second case is related to a petition filed by Prakash Chandra Mohanty for quashing the entire criminal proceeding along with order taking cognizance for the offence under Sections 406, 420, 506, 504 of the IPC by a Jamtara court.
Delivering judgement on a petition filed by MESCO Steel Ltd on March 17, a single bench of Justice Gautam Kumar Chaudhary observed that in order to make out a case of cheating, there should be material to make out a prima facie case that the accused had fraudulent or dishonest intention at the time of making the promise.
“Deception is the essence of the offence of cheating. Mere breach of contract is not criminal, unless it was at the same time dishonest and was manifested by some overt act,” the court observed.
Justice Chaudhary referred to a judgement in Hridaya Ranjan Prasad Verma v. State of Bihar & Others which said that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed.
“It is the intention which is the gist of the offence. From his mere failure to keep up a promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed,” the court said.
“In case of criminal breach of trust, the pivotal ingredient is entrustment of property followed by misappropriation. Deception since inception is not a fundamental ingredient of the offence, as it may arise later when the property so entrusted is misappropriated.
“There is a difference between misappropriation and the mere non-fulfilment of legal obligation. In every criminal breach of trust a breach of contract is implicit. The determining factor to impute criminality in a particular case is whether the proceeded against had acted dishonestly. The distinction between cheating and breach of contract lies in the intention of the accused at the time when the inducement was made,” the court said.
The court observed that this case is yet another instance of a purely civil dispute regarding non-payment of sale amount being given a criminal colour to launch criminal prosecution against the petitioners. “In any case criminal prosecution cannot be permitted as an arm-twisting measure to settle and extract dues for which efficacious civil remedy is available,” the court said.
The court referred to the Vijay Kumar Ghai v. State of W.B. that said that any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.
Meanwhile, the prosecution story in the second case is that the informant was the Director of R.S.S.G. Consortium Pvt. Ltd. which had entered into an agreement with Bajrangbali Transport Agency and jointly awarded a contract on 23.12.2015 for loading of coal from Mahanadi CoalFields Ltd to the tipper. The work place was situated under District Sundergarh, Orissa and in order to facilitate the execution of work, the informant entered with Prakash Chandra Mohanty (petitioner) in a memorandum of understanding to monitor and supervise the work. He was also authorized to operate a current account in SBI Jamtara. Thereafter he started supervising the work of an informant.
“The present case is clearly a sequel to the civil and criminal cases filed by the petitioner in order to wreak vengeance against the latter,” the court said.
Quashing this case too, Justice Chaudhary referred to a judgement in Vijay Kumar Ghai & Ors. v. State of W.B. & Ors. Which said: “ This Court has time and again cautioned about converting purely civil disputes into criminal cases… Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.”
The Jharkhand high court again referred to a judgement in Surendra Nath Pandey & Anr. v. State of Bihar & Anr. which held that criminal prosecution cannot be allowed to proceed on the basis of bald and omnibus allegations in the FIR, as the same will constitute an abuse of the process of the Court and such prosecution may in all likelihood be abortive and futile.