Every Breach Of Contract Would Not Amount To Breach Of Trust Or Cheating To Initiate Criminal Proceedings: Kerala High Court

Justice A. Badharudeen quashed the proceedings against the petitioners on finding that it was a mere breach of contract and not breach of trust.

“Each and every breach of contract would not amount to breach of trust or cheating, unless the every intention to cheat and defraud the defacto complainant at the very inception is to be born out from the prosecution records. Merely for breach of contract, criminal proceedings would not lie and the remedy in case of breach of trust is to sue for damages.”

The petitioners were accused for allegedly cheating the defacto complainant by entering into an agreement with intent to cheat to gain unjust enrichment. It was alleged that the petitioners failed to perform their terms of the agreement and cheated the defacto complainant and committed breach of trust also. Thus crime was alleged for committing offences punishable under Sections 405, 406, 415, 418, 420 read with 34 of IPC.

The Petitioners contended that terms of the agreement could not be materialized which is a breach of contract and the remedy is file suit for damages. It was stated that every breach of contract would not amount to a breach of trust.

On perusing the agreement, the Court stated that every breach of contract would not amount to a breach of trust and cheating. It stated that the petitioners failed to perform their part of the agreement which would amount to breach of contract and that criminal proceedings are unwarranted.

As such, the Court allowed the petition and quashed the criminal proceedings against the petitioners.

Counsel for Petitioner: Advocates Varghese C.Kuriakose, Susanth Shaji,

Albin A. Joseph, Amritha.J

Counsel for Respondents: Public Prosecutor Renjith George

Citation: 2024 LiveLaw (Ker) 404

Case Title: Mansoor Ali v State of Kerala

Case Number: CRL.MC NO. 7104 OF 2023

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