Criminal proceedings quashed against corporate employees where civil dispute lacks specific allegations of criminal intent.

The petitioners sought quashing of Complaint Case No. C-1610 of 2018, pending before the Judicial Magistrate, 7th Court, Alipore, under Sections 406, 415, 418, 420, 506 and 120B of the Indian Penal Code, 1860.

The dispute arose from the complainant’s purchase of a flat from Amrapali Hirise Private Limited. The complainant had previously initiated proceedings before the Consumer Forum in 2017 concerning the same transaction, in which the present petitioners were not named.

The petitioners, shown as accused nos. 3 and 5, were respectively alleged to be a director and an employee of the company. The specific allegation against them was that they had attended a meeting with the complainant at a restaurant on 16 June 2017 and represented that her deposit would be returned within three months.

The complaint further alleged that accused nos. 1, 2 and 6 to 11 had entered into the agreement for sale dated 10 July 2013. The Court noted that the petitioners were not parties to that agreement.

Whether the allegations in the complaint, taken at face value, disclose the ingredients of offences under Sections 406, 415, 418, 420, 506 and 120B IPC against the petitioners?

Whether continuation of the criminal proceeding, arising substantially out of a flat-purchase and refund dispute, would amount to an abuse of the process of law warranting exercise of the High Court’s inherent jurisdiction under Section 482 CrPC?

Whether the petitioners could be subjected to criminal prosecution when they were not parties to the agreement for sale and the principal allegations were directed against another accused?

The Court applied the principles governing cheating under Sections 415 and 420 IPC, namely, deception, fraudulent or dishonest inducement, delivery or retention of property, and resulting or likely damage; dishonest intention must exist at the inception of the transaction, and a mere breach of contract does not constitute cheating.

Section 406 IPC requires entrustment of property and a fiduciary relationship; a normal sale or exchange of consideration does not amount to entrustment. Criminal intimidation under Sections 503 and 506 IPC requires a threat intended to cause alarm or compel the complainant to act or refrain from acting.

The Court further relied on Section 482 CrPC and the principles in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, under which proceedings may be quashed where the allegations do not constitute an offence, the supporting material is insufficient, or the proceeding is manifestly attended by mala fides or instituted for an ulterior purpose.

The Court also relied on Ramesh Chandra Gupta v. State of Uttar Pradesh, 2022 LiveLaw (SC) 993, and Vineet Kumar v. State of Uttar Pradesh, (2017) 13 SCC 369, which recognise the High Court’s duty to prevent abuse of process and secure the ends of justice.

The Court found that the dispute was essentially civil in nature and related to the purchase of a flat and alleged non-refund of money.

The petitioners were not parties to the agreement for sale and the principal allegations were directed against Malay Bose and other parties connected with the transaction.

Their alleged presence at a restaurant and representation that the money would be returned within three months did not establish deception or dishonest intention at the inception of the agreement, as required for cheating under Sections 415 and 420 IPC.

Nor did the allegations disclose entrustment for the purposes of Section 406 IPC or any specific threat intended to cause alarm under Section 506 IPC.

Applying categories 1, 3 and 7 of Bhajan Lal, the Court held that the complaint did not prima facie disclose the essential ingredients of the alleged offences against the petitioners and that continuation of the prosecution would constitute an abuse of process.

Complaint Case No. C-1610 of 2018 under Sections 406, 415, 418, 420, 506 and 120B IPC was quashed in respect of the petitioners, Amrapali Bose and Dipanjan Ray @ Dipayan Roy.

All connected applications were disposed of, any interim order was vacated, and the judgment was directed to be communicated to the Trial Court for necessary compliance.