January 09, 2019
Case name: Raj Kumar Gupta & Ors vs State Of Bihar & Anr.
The core issue in the case was that the dispute between the parties resulted from a financial transaction, that too arising out of a commercial agreement between them, hence institution of a criminal case was an abuse of the process of the Court.
In view of the facts of the case, the High Court of Patna noted that the allegation relates to a business transaction. With reference to commission of offence under Section 420 of the Indian Penal Code the Court was of the view that there should be cheating and dishonest intent to deceive the person to deliver any property, whereas in the present case there was no cheating involved for the reason that if there is failure on the part of one of the parties to act in terms of a business/commercial agreement, that too, involving payment of money and non-performance or supply of any goods, the issue is purely civil in nature and the course obviously is the civil Court of competent jurisdiction either for recovery of the money or for a direction to supply the goods and/or payment of compensation/cost etc. However, a criminal case being instituted in such case clearly would be abuse of the process of the Court.
The High Court also made reference to Supreme Court’s judgment in the case of Indian Oil Corporation v. NEPC India Ltd., wherein it was opined by the Court that ….Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged……”
The entire case can be accessed here.
 (2006) 6 SCC 736