No Specific Allegation Or Privity Of Contract: Calcutta High Court Sets Aside Criminal Proceedings Against Company Director

The Calcutta High Court recently allowed a petition seeking revision of a Trial Court order which initiated criminal proceedings against the director of “GPT Infra Projects Limited”, finding no privity of contract with the complainant M/s Vinayak Construction.

A single-bench of Justice Bibhas Ranjan De observed that Vinayak Construction was hired by B2R, a partnership firm, to complete a portion of certain contract work for GPT Infra. As per the complaint, the persons employed by Vinayak Construction to oversee the work misappropriated the payments in conspiracy with B2R and GPT Infra.

The bench noted that the entire complaint filed by Vinayak Constructions under 156(3) CrPC was against B2R and their own agents, and only in the last part of the complaint does it allege any illegality on part of GPT. It held,

“In this case also there was no privity of contract in between GPT and M/s Vinayak Construction. Not only that, there was no specific allegation against GPT (Principle Contractor) in the complaint under Section 156(3) of CrPC...I do not find anything specific against GPT…from that point of view also petitioner i.e. Director of G.P.T cannot be held liable in absence of any transaction or entrustment between M/s. Vinayak Construction and G.P.T as I have already discussed hereinabove that there was no such allegation of transaction or entrustment…In the aforesaid view of the matter, the impugned Criminal Proceeding against the petitioner i.e. Gopal Tantia @ Gopal Prosad Tantia, Director of GPT Infra Project Limited only is liable to be quashed and set aside.”

The Court relied on the case of U. Dhar & Anr. Vs. State of Jharkhand & Anr. (2003) 2 SCC 219 where criminal proceedings were quashed in relation to an independent contract regarding execution of certain works, where there was no privity of contract between the complainant and the accused.

Justice De thus held, "Director of G.P.T cannot be held liable in absence of any transaction or entrustment between M/s. Vinayak Construction and G.P.T."

The bench thus allowed the revision application and quashed the direction for investigation into the director of GPT, holding that in the absence of specific allegations, there was no basis in the 156(3) CrPC complaint for such a direction, and because there was no privity of contract on part of GPT in the series of fraudulent acts that were claimed.

Case: Shree Gopal Tantia @ Gopal Prasad Tantia Vs. The State of West Bengal & another

Coram: Justice Bibhas Ranjan De

Citation: 2023 LiveLaw (Cal) 173

Appearances:

For the Petitioner: Mr. Ayan Bhattacherjee, Adv. Mr. Aditya Ratan Tiwary, Adv.

For the State: Mr. Arijit Ganguly, Adv. Mrs. Debjani Sahu, Adv.

Click Here To Read/Download Judgment