Court has time and again cautioned about converting purely civil disputes into criminal cases: SC allows bail plea of 2 accused in alleged case of criminal breach of trust & cheating
Justices Sanjiv Khanna & Dipankar Datta [19-01-2024]

Read Order: JAY SHRI & ANR v. STATE OF RAJASTHAN [SC-CRIMINAL APPEAL NO.14423 OF 2024]

Tulip Kanth

New Delhi, January 22, 2024: While granting bail to two accused in a case of criminal breach of trust and cheating, the Supreme Court has reiterated 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.

By an Order dated 08.11.2023, titled as Jai Shri & Anr vs State of Rajasthan, the Top Court had observed that the petitioners – Jay Shri and Hitesh Kela were not supposed to be arrested in connection with First Information Report registered under Sections 420 and 120-B of the IPC till the next date of hearing.

It was the case of the petitioners therein that a case of civil dispute made out as non-execution of the Agreement to Sell etc. is not a criminal offence under Sections 420 and 120-B of the Indian Penal Code, 1860.

Placing reliance upon Sarabjit Kaur v. State of Punjab and Another [LQ/SC/2023/216], the Division Bench of Justice Sanjiv Khanna & Justice Dipankar Datta said, “Prima facie, in our opinion, mere breach of contract does not amount to an offence under Section 420 or Section 406 of the Indian Penal Code, 1860 (For short, IPC), unless fraudulent or dishonest intention is shown right at the beginning of the transaction.”

Furthermore, referring to the judgments of the Top Court in Indian Oil Corpn. v. NEPC India Ltd. and Others [LQ/SC/2006/634] ; Vijay Kumar Ghai and Others v. State of West Bengal and Others, [LQ/SC/2022/388 ;], the Bench held that the Top Court has time and again cautioned about converting purely civil disputes into criminal cases.

Reliance was also placed upon Indian Oil Corpn. v. NEPC India Ltd. and Others [LQ/SC/2006/634], in order to affirm 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.

In view of such settled position, the Bench felt that the appellants – Jay Shri and Hitesh Kela had made out their case for grant of anticipatory bail.

“Accordingly, it is directed that in the event of the appellants – Jay Shri and Hitesh Kela being arrested in connection with First Information Report (FIR) no. 0220/2022 dated 26.08.2022 registered with Police Station – Osiyan, District – Jodhpur Rural, Rajasthan for the offence(s) punishable under Sections 420 and 120B of the IPC, they shall be released on bail by the arresting/investigating officer or the trial court on terms and conditions to be fixed by the trial court”, the Bench ordered.