In a recent ruling, the Supreme Court reiterated the authority of High Courts to dismiss criminal prosecutions stemming from civil transactions, citing the precedent set in the case of Paramjeet Batra v. State of Uttarakhand (2013) 11 SCC 673.
Overturning the decision of the High Court, which had declined to quash a pending criminal case against the accused, Justices Sudhanshu Dhulia and PB Varale emphasized the necessity for High Courts to intervene and quash proceedings arising from civil transactions to prevent the abuse of legal processes. They underscored that continuation of such proceedings would be unwarranted in the absence of criminal intent.
The judgment authored by Justice Sudhanshu Dhulia referenced the case of Usha Chakraborty & Anr. v. State of West Bengal & Anr., which reaffirmed the principle established in Paramjeet Batra. The Court highlighted that disputes essentially of a civil nature should not be cloaked as criminal offenses, and emphasized the importance of maintaining a balance between the rights of protesters and the public interest.
The dispute in question involved a complaint filed against the accused for allegedly failing to pay the full amount owed for assembling bicycles. The Supreme Court noted that the issue was primarily civil in nature, revolving around the number of bicycles assembled and the corresponding payment due. It emphasized that the absence of evidence demonstrating fraudulent intent on the part of the accused rendered the dispute civil in essence.
Relying on the precedent set in Paramjeet Batra, the Supreme Court clarified that not every breach of contract amounts to cheating, and criminal proceedings should be quashed if the dispute originates from a civil transaction. The Court concluded that the criminal case in question lacked any criminal element and amounted to an abuse of legal process.
Consequently, the appeal was allowed, and the pending criminal proceedings against the accused were quashed.
Case: NARESH KUMAR & ANR. VERSUS THE STATE OF KARNATAKA & ANR.
