The Allahabad High Court, Lucknow Bench recently while allowing an application for anticipatory bail has held that mere non-payment of money paid under a contract cannot be a ground for criminal prosecution and certainly not a ground for rejection of the anticipatory bail application of the accused person.

Justice Subash Vidyarthi while noting the practice, thus observed that “…Nowadays it is becoming a general practice to set the criminal law into motion for putting pressure on the parties to commercial transactions. Instead of initiating civil proceedings for specific performance of contracts, accounting or recovery of money, where the plaintiff / claimant has to pay Court fee and where the decision of the dispute consumes a very long time, F.I.Rs. are filed with the object of getting the other party incarcerated to put pressure on him so as to make him redress the grievances of the informant”.

The Court further clarified that “However, the Courts cannot shut their eyes in such matters so as not to ascertain whether there is sufficient material to warrant incarceration of the accused person and to examine whether the criminal proceedings are being used for prosecution of a person who has committed an offence or the same are being misused for persecution of a person who has committed a breach of an agreement by giving the disputes a color of criminality”.

Advocate Purnendu Chakravarty appeared for the applicant, AGA Arvind Kumar Pandey appeared for the State and GA Digvijay Nath Dubey appeared for the informant.

In the present matter, the informant alleged that money was transferred to the applicant in furtherance of an agreement to carry out business of mining of Morang (minor minerals used in construction activities), however was not paid, and thereby it was claimed that the accused persons have committed a breach of the agreement.

The applicant sought an anticipatory bail for the offences under Sections 323, 504, 506,406, 420, 467, 468, 471 IPC. The State and the informant filed counter affidavits opposing the anticipatory bail application.

The informant contended that the non-payment of money is in breach of the agreement and thereby the applicant is not entitled for anticipatory bail. Further argued that the applicant had earlier filed an application under Section 482 CrPC, and in the order dated September 6, 2022, the applicant intended to pay the entire amount of Rs 2 crore to the informant. However, the Court on the next date dismissed the application upon gathering that the applicant had no intention to pay.

It was further alleged that the informant was induced into entering into a joint venture agreement on the basis of a forged letter of intent purportedly issued by the Additional District Magistrate (Finance & Revenue), on behalf of the District Magistrate, Banda.

However, the Court noted, “…there is no categorical assertion as to who had forged the letter and, in any case, there is no allegation that the letter had been forged by the applicant”.

Noting that the proceedings have been initiated before the Commercial Court, Gwalior for recovery of the money, and that the proceedings are pending, therefore, the bench was of the opinion that it will not be appropriate for the Court to make any observation on the issue of payment of money to the applicant and the informant’s entitlement for recovery.

Furthermore, while referring to Kamlesh and Anr. v State of Rajasthan and another, 2019 SCC OnLine SC 1822 the Court also noted that the dismissal of the applicant’s application under Section 482 CrPC would not be a bar against consideration of the merits of his application for anticipatory bail.

Cause Title: Vijay Pal Prajapati v State Of U.P. Thru. Prin. Secy. Home Lko [Neutral Citation No. - 2023:AHC-LKO:50394]

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Justice Subhash Vidyarthi

Agatha Shukla