Criminal Law Can’t Be Used For ‘Recovery Of Money’ Unless Offence of Cheating/Criminal Breach Of Trust is Established: Karnataka High Court​

The Karnataka High Court in the recent case of Amit Garg Vs. State of Karnataka held that the criminal law cannot be set into motion for recovery of money paid under a contract, unless the offence of cheating or even criminal breach of trust is established.​

The Petitioner therein had approached the High Court seeking to quash the FIR registered against him by one Mr. Neeraj Kukreja, the Director of M/s Pegasi Spirits Pvt. Ltd., for allegedly supplying the inferior quality of N 95 Masks.​

The Petitioner contended that the entire issue was in the realm of the contract and there was no cheating or dishonest intention at the inception on the part of the Petitioner.​

The Complainant refuted the submissions of the Petitioner by submitting that though the dispute was in the realm of the contract, the dishonest intention of the Petitioner to cheat was right there from the inception, that is when the supply was made, and therefore, the entire consignment could not be put to use due to its poor quality. ​

The bench relying on Section 415 of Indian Penal Code,1860 held, “In the case at hand, finding of poor quality of masks was at a later point in time. This cannot amount to cheating or deception at the inception of the contract since they were supplied after supplying samples. If the complainant could not wait for the samples to be checked by the appropriate laboratories, the offence of cheating cannot be laid against the petitioner.” Hence the application was thereby disposed of.