[News18] Failure to pay portion of owned money not a criminal offence unless there is fraudulent intention from beginning, says Calcutta HC

The Calcutta High Court on Monday quashed criminal proceedings under Sections 484, 406 and 34 of the IPC against a businessman who allegedly refused to pay a portion of the price of goods purchased by him.

The Single Judge Bench of Justice Ajoy Kumar Mukherjee quashes the proceeding on the ground that the accused did not have any fraudulent or dishonest intent from the start of the transaction to pay a portion of the price of goods purchased.

“Someone’s inability to pay a portion of the price of goods purchased by him cannot give rise to a criminal prosecution or criminal breach of trust or cheating unless the fraudulent and dishonest intention is shown right from the beginning of the transaction, as mens rea is the crux of the offence,” Justice Mukherjee said.

In the present case, on April 02, 2018, the opposite party filed a complaint before the  Additional Chief Judicial Magistrate, Dinhata alleging that on February 19, 2017, petitioner 1 who is a businessman had purchased jute from him worth Rs. 9,25,000/- but later on refused to pay the amount.

The complaint case that was pending before ACJM Dinhata was dismissed for non-prosecution.

After more than one and half year of the dismissal order the opposite party filed present complaint on the same cause of action. In this, he stated that the petitioner had given Rs.5,00,000/- out of Rs. 9,25,000/ and subsequently when the opposite party demanded the rest amount, the petitioner refused to pay the same.

The petitioner had filed an application before the High Court under Section 482 of the CrPC, praying for the quashing of proceedings currently pending before the Judicial Magistrate, Cooch Behar, under Sections 484 (Counterfeiting a mark used by a public servant), 406 (Punishment for criminal breach of trust), and 34 (Acts done by several persons in furtherance of a common intention).

The counsel representing the petitioner submitted that the claims levied are utterly frivolous and without merit, further the entire complaint is driven by malice and malafide and has no actual substance.

Further, it was added that out of Rs. 9,25,000/-, petitioner no.1 had paid Rs. 5,00,000/- to the opposite party and subsequently when the opposite party demanded the rest of the amount, the petitioner had refused to pay the same.

Justice Mukherjee noted that the petitioner had paid Rs. 5,00,000/- to the opposite party, so it cannot be said that right from the beginning of the transaction, the petitioner had any fraudulent or dishonest intention i.e. the mens rea.

“The legislature intends to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements,” the court added.

The court stated that the continuation of the present proceeding pending against the present petitioners will be sheer abuse of the process of the court.

Accordingly, the bench quashed the proceeding pending before Judicial Magistrate Dinhata, under sections 420/406/34 of the IPC.

Case Title: Girish Lahoti & Anr. v. Firdous Alam

Statute: The Indian Penal Code