2018 (12) TMI 1907 - SC - Indian Laws

Availing of intellectual services for marketing the products of the complainant - non-payment of amount due and payable under the agreement - HELD THAT - The learned High Court has not committed any error in quashing the criminal proceedings initiated by the complainant. Even considering the allegations and averments made in the FIR and the case on behalf of the Appellant, it cannot be said that the ingredients of Sections 406 and 420 are at all satisfied. The dispute between the parties at the most can be said to be the civil dispute and it is tried to be converted into the criminal dispute. Therefore, continuing the criminal proceedings against the Accused will be an abuse of process of law and, therefore, the High Court has rightly quashed the criminal proceedings. Merely because the original Accused might not have paid the amount due and payable under the agreement or might not have paid the amount in lieu of one month Notice before terminating the agreement by itself cannot be said to be a cheating and/or having committed offence Under Sections 406 and 420 of the Indian Penal Code as alleged. The High Court has rightly exercised the powers Under Sections 482 of the Code of Criminal Procedure and has rightly quashed the criminal proceedings - Appeal dismissed.

Summary

Issues Involved:
Quashing of criminal proceedings under Sections 406 and 420 of the Indian Penal Code by the High Court based on the contention of the dispute being a civil matter.

Analysis:
The case involved an appeal against the quashing of criminal proceedings by the High Court under Sections 406 and 420 of the Indian Penal Code. The appellant, who was the original complainant, alleged that the accused failed to pay the amount due under an agreement for intellectual services, thus committing the offense of cheating. The High Court quashed the proceedings, stating that the dispute was primarily civil in nature and did not satisfy the elements of Sections 406 and 420 of the IPC. The High Court observed that converting a civil dispute into a criminal one was unjustified. The appellant challenged this decision in the Supreme Court.

The appellant argued vehemently that the High Court erred in quashing the criminal proceedings, emphasizing that the accused breached the agreement by not making full payment as per the terms. The appellant contended that the accused's actions amounted to cheating, especially by not providing one month's notice before terminating the contract. The appellant highlighted discrepancies in the High Court's decision process, claiming that the initial dismissal of the application was later changed, warranting the quashing of the judgment.

On the other hand, the respondent, representing the accused, supported the High Court's decision, asserting that the matter was civil in nature and lacked criminal elements under Sections 406 and 420 of the IPC. The respondent argued that the High Court rightfully quashed the proceedings, as no criminality was established in the case.

After considering the arguments from both sides and reviewing the High Court's judgment, the Supreme Court upheld the decision to quash the criminal proceedings. The Supreme Court concurred with the High Court's assessment that the dispute was primarily civil and did not meet the requirements of Sections 406 and 420 of the IPC. The Supreme Court agreed that continuing the criminal proceedings would amount to an abuse of the legal process. The Supreme Court dismissed the appeal, emphasizing that the accused's actions did not constitute cheating or offenses under the relevant sections of the Indian Penal Code. The Supreme Court found no merit in the appellant's contentions regarding the alleged discrepancies in the High Court's decision-making process, affirming the correctness of the High Court's judgment.