Mere Breach Of Contract Can't Be Basis For Criminal Case For Cheating : Supreme Court

The Supreme Court observed that a mere allegation of failure to keep up promise will not be enough to initiate criminal proceedings.

A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, the bench of Justices Abhay S Oka and Rajesh Bindal said.

The bench added that the criminal Courts are not meant to be used for settling scores or pressurise parties to settle civil disputes.

In this case, the F.I.R. was registered against the accused under Sections 420, 120-B and 506 IPC on the basis of complaint made by the informant. The accused approached the High Court seeking quashing of the FIR. The High Court refused to quash the complaint.

In appeal, the Apex Court noted that the allegations made are of civil nature. Perusing the complaints, the bench noted:

"The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal Courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which F.I.R. was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the Court."

While allowing the appeal and quashing the FIR, the bench observed thus:

A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings.

Case details

Sarabjit Kaur vs State of Punjab | 2023 LiveLaw (SC) 157 | CrA 581 OF 2023 | 1 March 2023 | Justices Abhay S Oka and Rajesh Bindal

For Appellant(s) Mr. Amandeep Singh Jawandha,Adv. Ms. Anju Kaushik,Adv. Mr. Bankey Bihari, AOR Mr. Birendra Bikram,Adv.

For Respondent(s) Ms. Nupur Kumar, AOR

Headnotes

Code of Criminal Procedure, 1973;  Section 482 - Indian Penal Code, 1860 ; Section 420 - A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings - The criminal Courts are not meant to be used for settling scores or pressurise parties to settle civil disputes.

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