Rabin Das vs. The State Of Jharkhand

Held

The Court held that the dispute between the parties was essentially civil in nature. It noted that the complaint itself indicated substantial payments had been made (Rs. 2,52,64,611.65) and the alleged outstanding amount (Rs. 56,17,974.65) represented a debt. The Court reasoned that non-payment or underpayment of the price of goods, by itself, does not constitute cheating or criminal breach of trust, aligning with the principle laid down in *Vir Prakash Sharma v. Anil Kumar Agarwal*. The allegation of assault by directors travelling from West Bengal to Jamshedpur for such a dispute was deemed misconceived and an afterthought. The Court concluded that allowing the criminal proceedings to continue would amount to an abuse of the process of law. Therefore, the entire criminal proceeding, including the FIR, was quashed concerning the petitioners. The Court clarified that this order pertains only to the criminal aspect and would not prejudice any civil proceedings.

Facts

The petitioners, directors of Purulia Metal Casting Pvt. Ltd., sought to quash criminal proceedings initiated by Respondent No. 2, Chitranjan Sah, proprietor of M/s Ritu Rani Enterprises. The complaint alleged that Purulia Metal Casting Pvt. Ltd. failed to pay Rs. 56,33,612.13 for supplied iron fines/crop end muck. The complainant claimed to have supplied goods with government e-bills and paid GST, but the amount remained due despite demand notices. The complainant also alleged being assaulted by the accused persons and their associates. The petitioners argued that substantial payments, totaling Rs. 2,52,64,611.65, had been made, and the remaining dispute was civil in nature. They also contended that the allegations of assault were false, as the directors resided in West Bengal and the alleged incident occurred in Jamshedpur. The FIR was registered under Sections 406, 420, 120B, 379 & 34 of the Indian Penal Code.

Key Issues

1. Whether the criminal proceedings initiated under Sections 406, 420, 120B, 379 & 34 of the Indian Penal Code are an abuse of process of law, given that the underlying dispute appears to be civil in nature? Petitioner's Arguments: The petitioners argued that the dispute was fundamentally civil, arising from a business transaction involving the supply of raw materials. They contended that a significant portion of the payment had already been made, and the remaining amount, if any, constituted a debt recoverable through civil remedies. They further argued that the allegations of assault were fabricated and intended to strengthen a civil dispute by invoking criminal charges. The petitioners relied on the principle that every contract dispute should not be converted into a criminal proceeding and cited the case of *Vir Prakash Sharma v. Anil Kumar Agarwal*. Revenue/State's Arguments: The State submitted that a charge sheet had been filed against two accused persons, but the investigation concerning the petitioners was still open. The respondent No. 2 argued that the non-payment indicated an initial intention to cheat, and the case involved other IPC sections, including assault. He contended that the High Court should not exercise its power under Article 226 at this stage, and the arguments presented by the petitioners could be a subject matter of trial.