A contractual breach lacking criminal ingredients cannot sustain criminal prosecution.

The petitioner, a contractor, entered into an agreement with the Rural Works Department to construct and maintain two roads.

Following alleged non-completion and breach of the agreement, an FIR was registered, and the Chief Judicial Magistrate, Banka, took cognizance of offences under Sections 406, 420, 467, 468 and 471 of the Indian Penal Code (IPC).

The petitioner attributed delay to the Covid-19 lockdown and asserted that the works had since been completed.

The Executive Engineer’s counter-affidavit confirmed completion of both schemes and stated that no government funds had been misappropriated or embezzled.

The petitioner sought to quash the cognizance order and ensuing prosecution.

Whether the allegations of non-completion or delay in contractual road works, in light of the subsequent completion of the works and the absence of alleged fund misappropriation, disclosed criminal offences under Sections 406, 420, 467, 468 or 471 IPC.

Whether continuation of the prosecution would constitute an abuse of process warranting quashing of the cognizance order under the principles in State of Haryana v. Bhajan Lal.

The Court considered Sections 406, 420, 467, 468 and 471 IPC, which concern criminal breach of trust, cheating, forgery and use of forged documents, respectively.

It applied the quashing principle in State of Haryana & Ors. v. Bhajan Lal & Ors., 1992 Supp (1) SCC 335: where the allegations, accepted at face value, do not disclose the ingredients of a criminal offence, the criminal proceedings may be quashed.

The Court also treated a dispute arising predominantly from breach of contractual obligations, without criminal elements, as civil in nature.

The FIR principally alleged non-completion of contractual work, while the record showed that the works had been completed.

The Executive Engineer’s counter-affidavit further confirmed that there had been no misappropriation or embezzlement of government funds.

The Court found no allegation of forged documents and no criminal element sufficient to transform the contractual dispute into the offences charged.

Applying Bhajan Lal, it concluded that the allegations did not disclose the ingredients of criminal offences and that continuing the prosecution would serve no legitimate purpose and would abuse the process of the court.

It allowed the application and quashed the cognizance order dated 22 October 2021, together with the prosecution arising from Katoria P.S. Case No. 148 of 2021.