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Criminal proceedings based on Mere breach of contract cannot be considered as case of cheating : Supreme Court

Last Updated on March 15, 2023 by Administrator

ISSUE- The Supreme Court ruled that unless a fraudulent or dishonest intent existed from the very beginning of the transaction, a simple breach of contract does not warrant criminal prosecution for cheating.

FACTS OF THE CASE- The third complaint the complainant-respondent filed against the appellant over alleged fraud in a property sale agreement served as the foundation for this FIR. 

The complainant-respondent had not accused anybody of defrauding in the prior two complaints, which were founded on the identical circumstances as the third complaint. Instead, he had merely prayed for the recovery of the money he had paid in the agreement to sell. 

The appellant was not the target of the complaints, which were exclusively made against the real estate brokers. The FIR was subsequently challenged by the appellant before the Punjab and Haryana High Court, but the argument was rejected. The Supreme Court heard an appeal to this.

ARGUMENTS- It was remarked that the complainant’s efforts consisted only of exerting pressure on the appellant in order to recover his money. 

It was also observed that the complainant made no attempts to file any civil lawsuits against the appellant in order to execute the sale deed based on the purchase agreement. The complainant only went as far as submitting three identical criminal complaints to the police.

REASONING- Criminal courts are not intended to be used as a means of making amends or coercing parties into resolving civil issues. 

It would be a misuse of the court’s procedure to continue the proceedings.

JUDGEMENT- The court dismissed the case after allowing the appeal.

PROVISION USED IN THE CASE- Sections 420, Section 120B, Section 506 Indian Penal Code.

CASE TITLE- Sarabjit Kaur v. State of Punjab and Another

Written By- Nikita Shankar

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