Mere Breach Of Contract Not An Offence: SC Deprecates Conversion Of Purely Civil Disputes Into Criminal Cases
The Supreme Court, while granting anticipatory bail to an accused, observed that unless there is fraudulent intent at the outset of the transaction, a mere breach of contract does not amount to an offence under Sections 420 or 406 of the IPC.
Justice Sanjiv Khanna and Justice Dipankar Datta observed, “Mere breach of contract does not amount to an offence under Section 420 or Section 406 of the Indian Penal Code, 1860, unless fraudulent or dishonest intention is shown right at the beginning of the transaction. This Court has time and again cautioned about converting purely civil disputes into criminal cases.”
AOR Surya Kant represented the appellants, while AOR Milind Kumar appeared for the respondent.
The Court granted anticipatory bail to the appellants after an FIR was registered against them for the offences punishable under Sections 420 and 120B of the IPC. The Court directed that the appellants should be released on bail by the arresting/investigating officer or the trial court, subject to terms and conditions to be determined by the trial court. Additionally, the appellants were instructed to comply with the conditions specified in Section 438(2) of the CrPC.
The Court held, “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.”
The Court clarified that the provision of anticipatory bail should not be interpreted as an expression of the court's opinion on the case's merits and that the order passed should not impact civil proceedings.
Accordingly, the Supreme Court allowed the appeal.
Cause Title: Jay Shri & Anr. v. State of Rajasthan (2024 INSC 48)
Appearance:
Appellants: AOR Surya Kant, Advocates Prakash Kumar and Priyanka Tyagi
Respondent: AOR Milind Kumar and Charu Mathur, Advocates Gurkirat Kaur, Gulshan Parveen Khan, and Neha Kapoor