Hon'ble Supreme Court has recently quashed a criminal case of raud and breach of trust wherein the entire allegation was based upon contractual breach and the case was apparently filed to overcome the limitation for civil suit. The case is titled as AKHTAR SHAKEEL vs THE STATE OF UTTAR PRADESH decided on 03.02.2020.
Hon'ble Supreme Court observed and held as under:
"We have considered the submissions on behalf of the parties. The FIR lodged on 06.04.2017 states that the complainant was the proprietor of M/s. Glamour Corporate India. The appellant put forth a proposal to do the business of carpets which were to be supplied to Arizona Rugs & Lease Corner Company America. Believing the appellant, the complainant under trade invoices dated 27.06.2008, 21.11.2008, 28.04.2009, 01.06.2009 and 19.04.2009 supplied carpets worth US $ 47,798.10 equivalent to Indian Currency in the sum of Rs.31,54,674/-. The payment was made only for US $ 33,421.50 equivalent to Indian Currency in the sum of Rs.22,05,819/-. This was despite the fact that the entire payment had been received by the appellant from the American buyer. The balance amount of US $ 14,376.60 equivalent to Indian Currency in the sum of Rs.9,48,855/- has not been paid till date due to mala fide and mischievous intention. The payment was being lingered on one pretext or the other because of which the complainant had suffered loss. The complainant due to lack of capital was declared as NPA by the bank. This act of receiving the money from the American buyer and not transmitting it to the complainant was a fraud mischievously played by the appellant. The complainant kept demanding the payment and lastly on 26.03.2017 at about 8.00 a.m. the complainant visited the house of the appellant to remind him for the balance payment in the presence of the witnesses. The appellant refused to make the payment, abused the complainant, threatened to kill the whole family and stated that he was ready for litigation. Thus, the offence.
The allegations on the face of it reveals a contractual relationship between the parties in pursuance of which the respondent made supplies of carpets on credit. The respondent then received payment which was short and incomplete. The FIR was then lodged nearly nine years later in 2017. The complaint does not allege that the appellant had any dishonest intention from the inception of the business relationship to cheat the respondent by not making full payment for the goods supplied or misappropriate any payment received from the American purchaser by breach of trust by dishonest misappropriation. The mere use of words “mala fide” and “mischievous intention” cannot constitute a criminal offence in absence of any imputation of mens rea. Merely stating that the appellant had acted fraudulently and mischievously by retaining the amount stated to have been paid by the American Company and not transferring it to the complainant at best makes out a case for failure to make full payment of the goods supplied and which constitutes a purely civil money claim.
We also cannot loose sight of the fact that the FIR has been lodged nearly 9 years later, long after the limitation to file a suit for recovery of money dues had long expired. It therefore very legitimately leads to the inference that the institution of the criminal prosecution was basically to overcome the bar of limitation in preferring any money claim for payment due under a contract for supply of goods".
Read the Order here:
