Civil disputes regarding goods quality cannot be criminalized as conspiracy absent proof of agreement and fraudulent intent.

The Respondent No. 2 (complainant) filed a criminal complaint against seven parties, including the applicant company, alleging that he was induced by a Technical Service Engineer (Accused No. 6) to purchase 1,000 bags of cement for construction

The complainant utilized the cement on 01.08.2023 but later noticed manufacturing dates of February and March 2023 on unused bags

He presumed the cement had "expired," thereby weakening his building’s construction

Initially, the Magistrate issued a summoning order, which was subsequently set aside by the High Court on 22.03.2024, remanding the matter for reconsideration

Upon remand, the Magistrate dropped proceedings against the applicant on 04.05.2024

However, the 1st Additional Sessions Judge, in revision, set aside this dismissal on 14.07.2025 and remanded the matter again

Consequently, the Magistrate issued a fresh summoning order on 16.09.2025 for the offence of criminal conspiracy under Section 120-B of the IPC

The applicant approached the High Court seeking to quash the revisional order and the subsequent summoning order

1. Whether the allegations in the complaint and the evidence recorded disclose the essential ingredients of criminal conspiracy under Section 120-B of the IPC

2. Whether a corporate entity can be held vicariously liable for the alleged criminal acts of its employees in the absence of specific statutory provisions or evidence of the company being the "alter ego" of the perpetrator

3. Whether the dispute regarding the quality/expiry of goods supplied is primarily civil or consumer in nature rather than criminal

The court applied Section 120-B of the Indian Penal Code (IPC), which requires a "prior meeting of minds" and an agreement to commit an illegal act

It relied on the principle of "alter ego" as discussed in Commissioner of Income-Tax v. Akshay Textiles Trading and Agencies Pvt. Ltd., asserting that criminal intent can only be attributed to a company if the individual concerned was the "directing mind and will" of the entity

Furthermore, the court applied the cardinal principle of criminal jurisprudence established in Sanjay Dutt and Another v. State of Haryana (2025), which states that there is no vicarious liability in criminal law unless specifically provided by statute, and the complainant must make specific averments regarding the accused's active role and criminal intent

The Court observed that the primary grievance related to the alleged supply of "expired" cement, a matter essentially concerning a deficiency in goods

It noted that the complainant failed to provide any evidence of a prior agreement or fraudulent intent at the inception of the transaction to satisfy the requirements of Section 120-B IPC

Regarding corporate liability, the Court found that the complaint lacked specific averments demonstrating that the applicant company was the "directing mind" behind the alleged acts or that any statute provided for vicarious liability in this context

The Court criticized the Revisional Court for remanding the matter without recording specific findings against the applicant or identifying any perversity in the Magistrate's earlier order dropping the proceedings

Ultimately, the Court determined that the dispute was civil or consumer-centric and could not be converted into a criminal prosecution without evidence of dishonest intention

The Court allowed the application, setting aside the Revisional Court's judgment dated 14.07.2025 and the Magistrate's summoning order dated 16.09.2025

The matter was remanded to the learned Additional Chief Judicial Magistrate, Kashipur, to pass a fresh order in accordance with the law after independently considering the material on record