Creeda Sudhasini vs. The Inspector Of Police

Facts

The petitioners, husband and wife, sought anticipatory bail in a criminal case registered for offences under Section 420 of the Indian Penal Code. The complaint alleged that the first petitioner, in a construction agreement with the defacto complainant, failed to pay approximately Rs. 2.05 Crores upon completion of work. The petitioners contended that the contract was solely with the second petitioner, and the complaint was filed to harass them and extract money. They further stated they had initiated a civil suit for recovery of Rs. 11 Lakhs and had issued a legal notice claiming Rs. 31 Lakhs due to the defacto complainant, which was paid by cheque. The petitioners argued the entire transaction was civil in nature, and the lodging of a criminal complaint was an abuse of process.

Held

The Court held that the dispute, as presented, appeared to be primarily civil in nature. It noted that a difference of opinion had arisen from a construction agreement dated 01.03.2017, particularly concerning the payment of GST, which is a statutory liability. The Court observed that the contractor denied liability for GST, and the estimated GST amount in dispute was Rs. 1 Crore and 42 Lakhs. The Court reasoned that if this difference of opinion regarding GST and other account settlements could be resolved, it would likely bring an end to the entire dispute. Consequently, the Court found that the arrest of the petitioners was unnecessary at this stage. The Court granted anticipatory bail to the petitioners with specific conditions, including executing a bond of Rs. 5,00,000/- each, reporting to the police daily, and not tampering with evidence or absconding.

Key Issues

1. Whether the dispute arising from a construction agreement, involving alleged non-payment of dues and a disagreement over GST liability, constitutes a civil dispute or warrants criminal proceedings under Section 420 of the Indian Penal Code. Petitioner's Argument: The petitioners argued that the dispute was purely civil in nature, stemming from a construction agreement with differing opinions on account settlement. They contended that the criminal complaint was an abuse of process, filed solely to harass them and extract money, especially since they had already initiated civil proceedings for recovery and had issued a legal notice regarding outstanding dues. They emphasized that any differences in settling accounts should be resolved through the civil court. Respondent's Argument: The respondent police stated that the complaint had been registered and an inquiry was pending. The defacto complainant's counsel argued that the complainant was suffering daily due to non-payment of money.