As per case facts, an initial business deal took place in 2011 involving a generator supply and an advance payment. The purchasing company failed to complete the transaction over several ...
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IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
APPELLATE SIDE
Present:-
HON’BLE JUSTICE CHAITALI CHATTERJEE DAS.
CRR 1487 OF 2023
JAKSON LIMITED & ORS.
VERSUS
STATE OF WEST BENGAL & ANR.
For the Petitioners : Mr. Sandipan Ganguly, Sr. Adv.
Ms. Nandini Chatterjee, Adv.
Ms. Priyanka Sarkar, Adv.
For the Opposite : Mr. Arnnab Das, Adv.
Party no. 2 Ms. Syeda Romana Sultan, Adv.
For the State : Mr. Z.N. Khan, Adv.
Md. Kutubuddin, Adv.
Reserved on : 30.04.2026
Judgement on : 22.06.2026
Uploaded on : 22.06.2026
CHAITALI CHATTERJEE DAS, J.: -
1. The instant Revision Application has been filed for quashing of all proceedings
of G.R case no. 2182 of 2021 arising out of Entally Police Station case no. 296
of 2021, dated 02.09.21 under Section 420/406 and 120B of the Indian penal
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Code,1860 recently pending before the Learned Additional C hief Judicial
Magistrate, Sealdah.
Complaint case
2. The petitioner is a company incorporated under the Companies A ct, 1956
having its headquarter at Uttar Pradesh and its marketing office at several
places, including at Kolkata. The petitioner company dealing in the production
and manufacturing of diesel generators in collaboration with USA based for
namely Cummins and diesel Gensets cater use of every sector from residential
to commercial to heavy Industrial Gensets. A written complaint was initiated
by one Partha Pratim Nandi, Deputy General Manager, Account and Finance,
M/S Dollon’s Food Products Private Limited, against the present petitioners
alleging of cheating and Breach of trust . It was the case of the complainant
that on or about 21.1.2011 M/s Kaiser oils Private Limited, placed purchase
order of 380/304 KVA/KW DG set having a cost price of ₹16, 75, 000 to a
quotation dated 25.10.2010 given by the petitioner company. The order was
accepted by the petitioner company on the terms and conditions as agreed
between the parties. In terms of such agreement and earnest amount of ₹5, 02,
500 to be paid as an advance at the time of issuance of purchase order and
also agreed that the balance amount would be paid against proforma invoice
before dispatch, which is to be completed within a period of 4 to 5 weeks from
the date of placement of the purchase order. It was further agreed that in case
the purchase is not completed within the stipulated period, 50% of the amount
would be forfeited and the balance amount would be returned subject to
deduction of such amount of expenses as maybe incurred by the petitioner
company during the process of such transaction. However due to unavoidable
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circumstances their group company namely M/s Kaiser was unable to
proceed further and lateron Dollon Food Products approached the accused
company for procuring a Silent DG set and accordingly the accused company
issued an offer by a quotation dated 10
th
August 2019 and by a letter dated
4
th
November 2019 Kiser requested the accused company to adjust the
previous amount from the account of Kaiser to the account of Dollon in
respect of their order of the year 2019.The accused though replied and
accepted their request on account of lockdown it was not materialised.
Immediately after lockdown Dollon sent the purchase order in the year 24
th
July2020 but in reply the accused company informed such advance amount
was not reflected in their Books of account but the Banker’s certificate shows
the said amount was debited from the account of Kaiser Oil on 28
th
January
2011. Thereafter legal notice was sent but the accused company remained
silent and therefore the said company deceitfully took the money entrusted to
them.
The case of the petitioner
3. The petitioner no. 3 to 9 are the Directors of the said company and they
represent the board of the company from different dates of their inclusion in
the board. The petitioner no. 2 is the marketing officer of the company and
petitioner no. 10 is the territory manager of the petitioner no.1 company and is
responsible for the operations in the state of West Bengal. On 21.1.2011
Kaiser Oils Pvt. Ltd. placed the purchase order of a specific description having
a cost of Rs 16,75,000/-pursuant to a quotation which was duly accepted
with certain terms and conditions .As agreed an earnest amount of Rs
5,02,500/- to be paid as an advance amount at the time of issuance of
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purchase order and balance amount to be paid as an advance before dispatch
which would be completed within a period of 4 -5 weeks from the date of
placement of such order and in case of default 50% of such amount to be
forfeited and the balance amount to be returned subject to deduction of such
amount of expenses as may be incurred by the petitioner during process of
such transaction .The purchaser company failed to pay the balance amount
ant to take delivery pf the goods with a request from time to time not to
terminate the agreement and also informed their inability to pay the balance
amount for taking delivery. Thereafter on 24.4.2014, a proforma invoice dated
30.4.2014 for ₹14, 09, 263 for supply of 380 KVA, silent DG set was forwarded
by the petitioner company, requesting payment of balance amount for dispatch
of the said set. However, said amount was not sent again, causing termination
of the purchase order which was duly communicated to the purchaser
company. Suddenly after a gap of five and half years, the said Kaiser oil Private
Limited by a letter dated 4.11.2019 intimated that due to unavoidable
circumstances, they could not take delivery of the 500 KVA DG set. By a letter
dated 4.11.2019, Kaiser oil Private Limited informed that M/s Dollon’s Food
product Private Limited would be placing order for DG set to the petitioner
company and requested adjustment of the advance amount paid back in the
year 2011 with the purchase order to be given by said Dollon’s Food products
Limited. Pursuant to a quotation given by the petitioner company on
24.2.2020 a fresh purchase order was placed by M/s Dollan food product
Private Limited for delivery of factory assembled 500 KVA, silent DG set
comprising of Cummins engine with Genset Controller and Alternator mounted
on a common base complete with fuel tank with their features, amounting
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basic value of ₹2,650,000.00/- The said purchase order dated 24.7.2020
indicated payment terms as advance of ₹5,02,500 as paid and balance to be
paid on receipt of proforma invoice. The consideration value for the set was
stated exclusive of 18% extra GST freight charges up to site at Hooghly and
delivery to be made within 3 to 4 weeks from the date of purchase order. The
quotation dated 24.2.2020 raised upon invitation of Dollon’sFood product
Limited in a fresh quotation made on specific invitation pursuant to which
purchase order was placed by M/s Dolan‘s Food product Limited.
4. It is their further case that by a letter dated 24.7.2020 on behalf of Dollon‘s
Food product, the Director, Amartya Sikdar wrote to Territory manager of
Jakson Limited, Jakson House during the tenure of such quotation dated
24.2.2020 that M/s Dollon’s Food products had to completely shut down their
office, owing to lockdown declared by state government whereby purchase of
said DG set got delayed beyond their control. It is denied by the petitioner
company that in the said letter dated 24.7.2020, it was contained on behalf of
the product Limited that the petitioner company had agreed to adjust ₹5, 02,
500 paid by M/s. Kaiser oils against the bill to be raised on M/s. Dollon’s Food
Product Private Limited. The said money was not returnable and therefore the
request made by the complainant company to amend the purchase order and
it was duly informed that nothing could be stressed out regarding the deposit
of any advance amount by M/S Dolln’s Food P roducts Private Limited in
favour of the additional company. Despite repeated request made by the
petitioner company to amend the purchase order for enabling urgent dispatch
of DG said the purchase order was never amended and no advance amount
was paid, thereby making the purchase order itself, null and void.
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Submission
5. The argument advanced by the learned Advocate representing the petitioner
that the present Revisional application arises in such factual backdrop, which,
when properly appreciated, unmistakably reveals a calculated attempt to
convert what is at best. A long concluded and commercially abundant
transaction into a criminal prosecution, sold with a view to recover an amount
which has, by operation of Law, become irrecoverable in civil procedure. The
contention of the learned advocate of the petitioner is that in the decision of
Indian Oil Corporation versus NEPC India Limited and Others
1
has
empathetically cautioned that criminal proceedings cannot be permitted to be
used as a shortcut for enforcing civil claims as a tool of coercion in commercial
disputes. Similarly, in G. Sagar Suri and Another versus stage of U.P and
others
2
. It has been held by honourable Supreme Court that the criminal
process or not to be allowed to degenerate into an instrument of harassment
with dispute is essentially civil nature. The present case squarely falls within
the category and question of contemporaneous allegation of fraud or deception
arises. It is for that argued that the period that follows the year 2014 is of
decisive legal significance for nearly 5 years. Thereafter there was a complete
and unbroken silence between the parties. No demand for delivery was made,
no claim for refund was asserted and no grievance was articulated by the
purchaser. The purchaser who was under an obligation to perform did not take
steps to revive the transaction or assert any right. In this regard relied upon in
the decision passed in V.Y Jose and Another versus state of Gujarat and
1
(2006) 6 SCC 736
2
(2000) 2 SCC 636
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Another
3
, where it was held that disputes arising from contractual non-
performance cannot be elevated into criminal offences in the absence of
fraudulent intent at inception. That apart M/S Dolan Food products Limited
has no local standi to be a complainant as it is an admitted and
incontrovertible position that the transaction was of 2011 was entered into
exclusively between the petitioner company and M/S Kaiser Oils Private
Limited, and the said entity alone placed the purchase order, made the
advance payment and stood in a contractual relationship with the petitioners.
6. The Learned Counsel further submitted that the doctrine of Privity of contract
is not mere technicality but enforceability of contractual rights. The inter se
arrangements between third parties cannot create liability against the
petitioner. The issue of limitation lies at the very heart of the present matter
and provides the clearest indication of mala fide nature of the prosecution. The
alleged advance payment was made in 2011 and even if the communication of
2014 is taken as relevant point, the limitation period for instituting a civil suit
for recovery would have expired by 2017 and the initiation of crim inal
proceeding in 2021, after a delay of nearly a decade and as a deliberate
attempt to bypass the statutory part of limitation. Use of criminal law in that
manner is impermissible as held by the Hon’ble Supreme Court in the above
mentioned decisions. It is further argued that absence of essential ingredients
of offences under Section 420 and 406 IPC and in this regard relied upon to
the decision of Mohammad Ibrahim and Others versus state of Bihar and
Another
4
. Furthermore there is no inducement, no dishonest intention at
3
(2009) 3 SCC 78
4
(2009) 8 SCC 751
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inception, no delivery of property by the complainant, no entrustment and no
misappropriation where an act can be a failed, commercial transaction
between two parties which was never completed. Lastly, in the decision of
Sunil Bharti Mittal versus CBI
5
, where it has been held that doctrine of
Vicarious liability has no application in criminal law unless expressly provided
and that individuals cannot be summoned solely on the basis of their
designation. Accordingly prayed for quashing the entire proceeding.
7. The submission advanced by the learned advocate representing the opposite
party no. 2 at the outset challenges the very filing of this application for
questioning at the initial stage immediately when investigation started and the
accused persons were sent notice under section 41-A of the Cr.P.C. Therefore,
the application for quashing which has been preferred at such nascent stage
without completion of proper investigation, and before trial is liable to be
dismissed. In this regard he relied upon the decision of Kamal Shivaji
Pokarnekar versus State of Maharashtra
6
. It is also the contention of the
learned advocate that exercise of power under Section 482 of the Code in a
case of this nature is an exception and not the rule. In this regard relied upon
the three Judges Bench in the case of State of Karnataka versus M
Devendrappa
7
, paragraph 5, 6 & 9. It is submitted that the allegations in the
FIR and grounds mentioned in the written complaint of the opposite party no.
2 are defective ,the complainant clearly makes out triable offences before the
Learned Magistrate and the involvement of the petitioners/accused persons in
the commission of the offence. There is dishonest consignment of facts
5
(2015) 4 SCC 609
6
(2019) 14 SCC 350
7
(2002) 3 SCC 89
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amounts to the offence of cheating and the term “dishonest” is also defined in
Section 24 of the Indian Penal Code. The group of company of the Opposite
Party no. 2 M/s Kaiser Oils Private Limited, by a letter dated 4
th
September,
2019 intimated the petitioner company that against purchase of a 500 KVA DG
set an advance payment of ₹5,02,500 vide cheque dated 21.1.2011 drawn on
Allahabad Bank was made, but due to unavoidable circumstances, they were
unable to take delivery and further requested the petitioner company to adjust
the said amount with the purchase order by its group company, namely
Dollon’s Food Product. The present petitioner company on receiving the same
requested the Opposite Party no. 2 that they are transferring advance payment
of 5,02,500/- from the account of Kaiser Oil to the account of Dollon’s Food
product. Accordingly, the revised purchase order was sent on 24.7.2020 and
after that, it was intimated by the petitioner company that the amount paid by
Opposite Party no. 2 as advance payment is not appearing in their books of
account. The bank certificate acknowledges that such cheque was debited
from the account of M/S Kaiser Ois Private Ltd on 28.1.2011.
8. It is the stand taken by the learned advocate that even if there is a civil
dispute, there is no bar in coexistence of both civil and criminal proceedings.
In the decision of Indian oil Corporation versus NEPC India, as relied upon by
the learned advocate of the petitioner, it was held that a commercial
transaction or a contractual dispute apart from furnishing, a cause of action
for seeking remedy in civil law may also involve a criminal offence. Accordingly
prayed for dismissal of this Revisional application.
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Analysis
9. Heard the submissions made by both learned Advocates. On careful
consideration of the materials and record as well as the submissions made
before this court it is evident that the complaint was lodged by OP no.2
Dollon’s Food Product Private Limited company alleging cheating, breach of
trust and criminal conspiracy against the petitioner company . The genesis of
the dispute rests on a business deal initially took place between the petitioner
company and M/S Kaiser Oils Pvt Ltd in the year 2011 when a 500 KVA DG
set was ordered from the petitioner company. An account payee cheque to the
tune of ₹5,02,500 was also issued towards advance payment on 21.1.2011
drawn on Allahabad Bank. The materials on record unequivocally disclose
that since after 2011, no communication was made between the parties
regarding further payment on delivery of such DG s et or demand of early
delivery of the product or even regarding non-payment of any amount between
those two parties till 2014 when again at the request of M/s Kaiser a n invoice
was generated which was again failed due to unavoidable circumstances
.Thereafter on 10
th
August 2019, the present complainant company
approached the petitioner company for procuring a silent DG set and
accordingly, quotation was issued on 10 August 2019, and then it was
contended that the earlier payment made by Kaiser Oil Pvt Ltd of ₹5,02,500 to
be adjusted against the bill to be raised regarding such new order. Therefore
starting from 2011 M/S Kaiser who originally entered into the deal
continuously failed to pay the balance and to take delivery of product showing
a filmsy ground of unavoidable circumstances. The record glaringly manifest
the casual approach on the part of Kaiser in completing the deal despite giving
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privilege even after the violation of the stipulated time period mentioned in
original agreement containing the clause of termination on such, again in the
year 2014 and after a sabbatical of 5years suddenly approached with a request
to adjust the said amount of earnest money with the new deal to be placed by
a separate company Dollon’s Food Product . The record further reveals that
said Kaiser Oil Pvt Ltd could not complete the deal and subsequently
requested the present petitioner company that due to unavoidable
circumstances, they could not take delivery of the equipment and inform that
the Dollon’s Food Product will place the order and accordingly requested to
transfer such advance amount from account of Kaiser Oil Pvt Ltd to account of
Dollon’s Food Product Limited and then requested them to adjust the said
advance amount. After this letter dated 4.11.2019, the purchase order was
placed on 24.7.2020, for supply 500 KV silent DG set with a request for early
delivery by Dollon’s Food Product but failed to complete the transaction
because their company had to shut down going to lock down declared by state
government with effect from 28.3.2020. Therefore from the above factual
backdrop the legal question arises in absence of any privity of contract
between the complainant company and the petitioner company in respect of a
previous deal which was execu ted between Kaiser Oil and the Petitioner
company way back in the year2011 in respect of a separate deal can any
claim to adjust the earnest money paid in connection with the previous deal
can be adjusted and in case of refusal to entertain such request or denial of
such adjustment gives rise to lodge any criminal complaint alleging cheating
and breach of trust by the subsequent company. It is admitted that a fresh
order was placed by Dollon’s Food product with a specific description . The
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vital point arises in such factual backdrop, whether non-compliance or refusal
to adjust, such amount can attract any criminal liability or not. That apart
whether this court in exercise of power under Section 482 Cr.P.C can interfere
at the stage when on the basis of the complaint lodged by the opposite party
no. 2, investigation is still going on since 02.09.2021 and the Revisional
application was filed on 20.04.2023. It is disputed that the genesis of the
present matter lies in a commercial transaction balance amount in connection
with the transaction was not paid and the goods was not delivered.
10. According to the submission of the learned prosecution the officer in charge
has forwarded the letter to the learned prosecution which reveals that during
investigation it is found the complainant’s own narrative was that purchaser
failed to the pay the balance consideration which strikes at the very root of the
transaction. In absence of such payment, the petitioner company was under
no obligation to proceed with dispatch and the transaction necessarily
remained incomplete. In the case of Indian oil Corporation versus NEPC
India Limited (Supra) Hon’ble supreme Court held and observed that:-
“While on this issue, it is necessary to take notice of
a growing tendency in business circles to convert
purely civil disputes into criminal cases. This is
obviously on account of a prevalent impression that
civil remedies are time consuming and do not
adequately protect the interest of lenders/creditors.
Such a tendency is seen in several family disputes
also, leading to irretrievable break down of
marriages/families. There is also an impression that
if a person could somehow be entangled in a criminal
prosecution, there is a likelihood of imminent
settlement. Any effort to settle civil disputes and
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claims which do not involve any criminal offence, by
applying pressure do criminal prosecution should be
deprecated and discouraged.”
11. In the case of G. Sagar Suri & Anr versus state of U.P & Others (Supra)
It was held by Hon’ble Supreme Court that criminal process or not to be
allowed to degenerate into an instrument of harassment where the dispute is
essentially civil in nature. It was held that:-
“It is to be seen if a matter, which is essentially of
civil nature, has been given a cloak of criminal
offence. Criminal proceedings are not a shortcut of
other remedies available in law. Before issuing
process, a criminal court has to exercise a great deal
of caution. For the accused it is a serious matter. This
court has laid certain principles on the basis of which
High Court exercise its restriction under section 482 of
the Code. Jurisdiction under this section has to be
exercised to prevent abuse of the process of any court
or otherwise to secure the ends of justice.”
12. In the present case the case of the complainant emerges from a deal entered
upon between M/s Kaiser Oils Private Limited who ordered a 500 KVADG set
from the accused company for which an advance payment of Rs. 5,02,500/-
was allegedly made by an account payee cheque on 21.1.2011. Due to
circumstances, the said company was unable to proceed further with the
purchase order later on M/S. the Dollon’s Food products Private Limited
approached the accused company for procuring a silent DG set and an offer
letter was issued on 10.8.2019 by M/S Food products Private Limited. Since
M/S Kaiser oils Private Limited could not procure the said item against which
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the advance was made request was made on 4.11.2019 to the accused
company to adjust transfer of the said amount of ₹5, 02, 500 from the account
of M/S Kaiser oil to M/s Dolln’s Food Product. Pursuant to such request and
repeated persuasion, the accused company accepted the request, and after
lockdown, the purchase order was sent on 24.7.2020 to the accused company.
In reply to the same, the accused company stated that such amount is
currently not appearing in their books of accounts. Despite several requests
made to the petitioner company to act upon email dated 4.3.2020, the
petitioner company remained silent . Accordingly lodged such complaint.
13. In the decision relied upon by the learned advocate of the opposite party no.
2 in Kamal Shivaji Pokarnekar versus state of Maharashtra (Supra) it
was observed by the Supreme Court that-
“Quashing of criminal proceeding is called for only
in a case when the complaint does not disclose
any offence or is frivolous, vexatious, or
oppressive. If the allegation set out in the
complaint do not constitute the offence of which
cognizance has been taken by the Magistrate, it is
open to the High Court to quash the same. It is not
necessary that a meticulous analysis of the case
should be done before the trial to find out whether
the case would end in conviction or acquittal”.
It was also observed by the Supreme Court taking note of the decision passed
in Indian Oil Corporation versus NEPC (India) Limited (supra) that the only
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question relevant is whether the averment in the complaint spell out the
ingredients of a criminal offence or not.
14. In the decision of Hon’ble three Judges Bench in State of Karnataka
versus M. Devendrappa (Supra) also it was held where such inherent
jurisdiction may be exercised, namely, (i) to give effect to an order under the
Code, (ii) to prevent abuse of process of court, and (iii) to otherwise secured the
ends of justice. It was held that while exercising power under the Section 482,
the court does not function as a court of appeal or revision. It is to be
exercised ex debito justitiae to do real and substantial justice for the
administration of which alone court exists.The parameters or situations where
this powered under section 482 of Cr. P.C can be exercised has been
elaborately dealt with in the decision of State of Haryana and Ors. vs
Bhajan Lal and Ors.
8
, where it was categorically mentioned that if such
situations are found in the complaint/FIR also such power can be exercised.
15. In the present case from the submission of the learned prosecution backed
by the letter address to the prosecution by the investigating officer, it is
glaringly visible that the investigation is no longer at the nascent stage and a
primary opinion can be found regarding the commercial nature of transaction
and non-fulfilment of certain terms and conditions in connection with such
transaction and failure to remit the balance transaction strikes at the very
route of transaction. However without putting much emphasis to such
observation which is subject to be accepted after a judicial scrutiny by the
Magistrate the content of the complaint by taking in its entirety seems to be so
8
1992 Supp (1) SCC 335
Page 16 of 18
improbable to attract any of the ingredients under which the allegations are
made . The facts and circumstances as portrayed before this court and found
from the record further reveals that there is a prolong delay in taking out a
complaint by the complainant, who was never a party to the original deal
which entered into between the present petitioner company and M/S Kaisar
Oil Private Limited and such transaction could not be completed because of
the silence on the part of said Kaisar Oil Private Limited, which has been
described as only due to unavoidable circumstances, raised after five years.
The relationship between such M/s Kaiser Oil and the present Opposite Party
no. 2 company M/s Dollon’s Food Product is absolutely silent and only
because of the complaint made by the petitioner company intimating about
non-receiving of any advance long back in the year 2011 from M/s Dollon’s
Food Product do not attract the ingredients to constitute an offence and either
under section 420 IPC or under section 406 IPC. In accordance with the terms
and conditions, admittedly M/S Kaiser Oil failed to pay the balance amount
and accordingly the said DG set was never delivered, and there was silence for
long five years. No demand notice or any other proceeding was initiated on
behalf of said M/s Kaiser Oil either to return the balance amount or to deliver
the goods and even after five years on their behalf, no such interest was
expressed and if their request is not fulfilled by the present petitioner company
by no stage of imagination can give rise to any offence under the aforesaid
provision. There is clear absence of entrustment of property or dominion over
property, dishonest misappropriation, conversion, use or disposal of such
property or violation of any legal direction or contractual obligation in respect
of such entrustment as required to Section 406, IPC (V.Y Jose & Anr versus
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state of Gujarat and Anr. emphasised) . At best the original complaint being
M/s Kaiser Compant at best claimed breach of terms regarding the earnest
money paid in terms of the terms and agreement agreed upon between them
and that also will be breach of terms and contract which can be claimed by
filing civil suit.
16. The parameters to exercise in the situation as described in the decision of
State of Harayanan vs Bhajanlal (supra) in clause (1) & (5) which is as
follows ;
“(1) -Where the allegations in the First Information
Report or the complaint ,even if they are taken on
their face value and accepted in their entirety do not
prima facie constitute any offence or make out a case
against the accused .
XXXXXXXXX
5) Where the allegations made in the FIR or
complaint are so absurd and inherently improbable
on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient ground
for proceeding against the accused.”
In the present case these parameters are apparent .
Conclusion
17. Therefore, considering the overall factor circumstances and) of the written
complaint and the submissions made before the court by filing their written
notes of argument and also considering the submission by the prosecution and
the letter of the investigating officer coupled with connected facts and
Page 18 of 18
circumstances, this Court is of considered view that the instant case is purely
coming under the above two categories and further it is attended with a
malafide an ulterior motive and hence this court must exercise the inherent
power to quash the proceeding qua the petitioners in absence of any justified
reason to allow this proceeding to be continued, which would be otherwise
sheer abuse of the process of court and hence is liable to be quashed.
18. Accordingly, this CRR 1487 of 2023 is hereby allowed. The entire proceedings
of G.R case no. 2182 of 2021 arising out of Entally Police Station case no. 296
of 2021, dated 02.09.21 under Section 420/406 and 120B of the Indian penal
Code, 1860 recently pending before the Learned Additional Chief Judicial
Magistrate; Sealdah is hereby quashed against the petitioners herein.
19. All other connected applications, if any, are hereby disposed of.
20. Urgent certified copy of the Order, if applied for, be provided to the parties
upon observance of all necessary requirements.
[CHAITALI CHATTERJEE (DAS), J.]
The judgment of Jakson Limited & Ors. vs. State of West Bengal & Anr., CRR 1487 of 2023, delivered by the Hon'ble Justice Chaitali Chatterjee Das on June 22, 2026, stands as a pivotal ruling in Criminal Revisional Jurisdiction, setting a crucial precedent for the Quashing of Proceedings related to commercial disputes. This significant decision, now accessible on CaseOn, carefully dissects the line between civil disagreements and criminal offenses, reaffirming that not every breach of contract warrants criminal prosecution.
The case originated from a complaint lodged by M/S Dollon's Food Products Private Limited (Opposite Party no. 2) against Jakson Limited & Ors. (petitioners), alleging cheating (Section 420 IPC), criminal breach of trust (Section 406 IPC), and criminal conspiracy (Section 120B IPC). The dispute traces back to 2011 when Kaiser Oils Pvt. Ltd., a group company of the complainant, placed a purchase order with Jakson Limited for a diesel generator (DG) set and paid an advance of ₹5,02,500. However, Kaiser Oils repeatedly failed to pay the balance and take delivery, citing 'unavoidable circumstances,' leading to the termination of the purchase order by Jakson Limited in 2014.
After a gap of over five years, in 2019, Kaiser Oils requested Jakson Limited to adjust the old advance payment against a new purchase order placed by M/s Dollon's Food Products Private Limited for a different DG set. Jakson Limited, however, denied this adjustment, stating that the old advance was not reflected in their current books and the new purchase order was never formally amended, rendering it null and void. Subsequently, Dollon's Food Products filed the criminal complaint in 2021, nearly a decade after the initial transaction.
The central legal question before the High Court was whether a refusal to adjust an advance payment from an old, unfulfilled commercial transaction between two different (though related) entities could give rise to criminal liability for cheating and breach of trust. Essentially, the court had to determine if the facts presented constituted genuine criminal offenses or merely a civil dispute that had been erroneously transformed into a criminal prosecution.
The court meticulously examined several Supreme Court judgments that caution against the misuse of criminal law for resolving civil disputes. Key principles relied upon included:
Legal professionals often find themselves needing to quickly grasp the nuances of such rulings. Fortunately, CaseOn.in's 2-minute audio briefs serve as an invaluable resource, helping practitioners and students swiftly analyze these specific judgments and their broader implications for criminal and corporate law.
The High Court's analysis revealed that the complaint primarily stemmed from a commercial transaction, not a criminal one. The court observed:
Based on these findings, the court concluded that the case squarely fit the parameters laid down in *Bhajan Lal* for quashing criminal proceedings, as the allegations were improbable and failed to make out a prima facie case of criminal offense.
The High Court unequivocally held that the instant case was purely a civil dispute, driven by a mala fide and ulterior motive to use criminal proceedings as a means to recover a civil claim. Allowing such a proceeding to continue would constitute a sheer abuse of the process of the court.
Therefore, the High Court allowed CRR 1487 of 2023, quashing the entire proceedings of G.R. Case No. 2182 of 2021 (arising out of Entally Police Station Case No. 296 of 2021, dated September 2, 2021, under Sections 420, 406, and 120B of the Indian Penal Code, 1860) against the petitioners.
This judgment serves as a vital reminder of the judiciary's role in upholding the distinction between civil and criminal wrongs. For lawyers, it reinforces the importance of critically evaluating the nature of a dispute before resorting to criminal remedies, especially in commercial transactions. It highlights that the mere breach of a contract, even if it involves money, does not automatically translate into a criminal offense like cheating or criminal breach of trust without the explicit presence of dishonest intent from the outset or a clear entrustment and subsequent misappropriation.
For law students, this case offers an excellent practical application of key Supreme Court precedents concerning the quashing of FIRs and criminal proceedings. It illustrates how courts analyze the ingredients of criminal offenses and prevent the abuse of the legal process. Understanding such judgments is fundamental for developing a nuanced perspective on the interplay between civil and criminal law in India.
All information provided in this article is for informational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, readers are advised to consult with a qualified legal professional for advice pertaining to their specific circumstances.
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