Inability To Pay Portion Of Goods' Payment Cannot Lead To Criminal Prosecution Unless Dishonest Intention Is Shown Right From The Start: Calcutta HC

The Calcutta High Court has quashed criminal proceedings registered against a businessman who was accused of refusing payment of portion of money owed by him.

“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 fraudulent and dishonest intention is shown right from the beginning of the transaction, as mens rea is the crux of the offence”, the bench of Justice Ajoy Kumar Mukherjee noted while quashing the criminal proceedings.

The complainant had alleged that he had sold jute to the petitioner valued at Rs. 9,25,000 out of which the petitioner had only paid Rs. 5,00,000 and had refused to pay the rest of the amount.

The Counsel appearing on behalf of the petitioner submitted that even if the allegations are taken at their face value, it does not prima facie constitute any offence or make out any case against the petitioner.

Advocate Anirban Banerjee appeared for the petitioner.

The Court noted that “…the petitioner had purchased jute from the opposite party no. 2 for an amount of Rs.9,25,000/- out of which he has only paid Rs. 5,00,000/- and refused to pay the rest amount, no dishonest representation or inducement could be found or inferred right from the beginning, since according to complaint the petitioner has paid Rs. 5,00,000/- out of total outstanding amount Rs. 9,25,000/-. 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 Court pointed out that the Apex Court had cautioned in number of cases against criminalizing civil disputes such as breach of contractual obligation. “The legislature intend to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements”, the Court said.

Thus the Court quashed the proceedings registered against the petitioner.

Cause Title- Girish Lahoti & Anr v. Firdous Alam

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