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2024 (7) TMI 1111 - SC - Indian LawsQuashing of criminal proceedings - Section 156(3) of Cr.P.C. - complainant failed to complete the work within the stipulated time due to which a show cause notice was issued to the complainant on 06.11.2017 seeking response for his failure to complete the work - HELD THAT - Undeniably, the agreement contains an arbitration clause and the arbitration proceedings have already commenced between the parties. When the dispute started, the first letter alleging complainant s failure to perform the work was issued by the appellant. In response to this communication, the complainant sent his reply (Annexure P-3) admitting that the construction activities have stopped due to his financial condition on account of imposition of GST and other hindrances - the complainant having himself admitted its inability to perform the work and requesting to settle the account as early as on 23.11.2017, it is certainly a civil dispute arising out of contract. The impugned order(s) of the High Court is set aside and the petitions under Section 482 Cr.P.C. are allowed - Appeal allowed.
Issues:
Appeal against order quashing criminal proceedings under Section 482 Cr.P.C. Analysis: 1. The appeals challenged a common order by the High Court rejecting the appellant's prayer under Section 482 of Cr.P.C. to quash criminal proceedings arising from FIR No. 113 of 2020 and an order by the SDJM directing registration of a similar FIR. 2. The case involved allegations of misappropriation by the appellant, who received funds but failed to pay the complainant, causing financial loss and contract breaches. The appellant claimed the complainant failed to complete the work, leading to a termination request and a new agreement with another company, which also failed to perform. 3. The appellant argued the disputes were civil in nature and should not be treated as criminal offenses. They contended that the criminal cases were an abuse of process, especially since arbitration proceedings had begun between the parties. 4. The Supreme Court found that the criminal proceedings arising from the FIR and the SDJM's order were an abuse of the court process, as the disputes were civil in nature, governed by an arbitration clause. The complainant's admission of financial inability to perform the work supported this conclusion. 5. Citing legal precedents, the Court emphasized that criminal proceedings should not be used as a tool for harassment or to pressure the accused. The judgments highlighted the need to prevent abuse of the court process and quash criminal proceedings when they lack elements of criminal offenses. 6. Ultimately, the Supreme Court allowed the appeals, setting aside the High Court's order and quashing the FIR and the SDJM's order, as the complaints were deemed predominantly civil in nature without elements of cheating or deception. The Court concluded that continuing police investigation would constitute an abuse of the court process.
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