A Commercial Contract Dispute Without Prima Facie Criminal Intent Does Not Sustain Criminal Prosecution.

The de facto complainant, a food-business owner, entered into a consignee sales-agent/distributorship arrangement with M/s J.R. Sara Food Marketing Pvt. Ltd. and paid ₹14,45,000 into the company’s bank account.

After some allegedly damaged or expired food products were supplied, the complainant alleged that replacement goods and a refund were not provided.

An FIR was registered under Sections 406 and 420 IPC.

The petitioners sought quashing, contending that the dispute arose from a commercial agreement and that the materials did not disclose the necessary criminal intent.

The High Court considered the record, including the case diary, and allowed the revision.

1. Whether the complaint and materials on record prima facie disclosed the ingredients of criminal breach of trust or cheating under Sections 406 and 420 IPC against the petitioners.

2. Whether continuation of the criminal proceedings, arising from the parties’ business agreement and alleged non-performance, would amount to an abuse of the process of law.

Sections 405–406 IPC require the ingredients of criminal breach of trust, while Sections 415–420 IPC require cheating, including fraudulent or dishonest intention at the time the relevant promise was made.

A contractual breach alone does not establish cheating; the complaint must disclose the requisite criminal intent.

The High Court may quash proceedings under Section 482 CrPC where, on the allegations and material considered, the ingredients of an offence are not prima facie made out or continuation would abuse the process of law.

The Court relied on Delhi Race Club (1940) Ltd. v. State of U.P., which stated that the same facts cannot, in the circumstances discussed there, simultaneously constitute criminal breach of trust and cheating.

The Court referred to the principles in Naresh Kumar v. State of Karnataka concerning quashing of essentially civil disputes.

The Court treated the parties’ relationship as a business arrangement governed by an agreement and noted that the dispute concerned alleged disagreements in the course of that transaction.

On examining the record, including the case diary, it found no prima facie material showing the criminal intent or other ingredients necessary for the alleged offences.

It therefore concluded that the allegations disclosed a contractual dispute rather than a basis for continuing the prosecution against the petitioners.

It allowed the revision and quashed Shasan Police Station Case No. 15 of 2024, corresponding to G.R. No. 489 of 2024, insofar as it concerned Rasmita Acharya and Shalendra Bajpai @ Sailendra Bajpai.

Connected applications were disposed of, any interim order was vacated, and the judgment was directed to be sent to the trial court.