Criminal Revisional Jurisdiction, Quashing Proceedings, Commercial Dispute, Cheating, Breach of Trust, IPC 420, IPC 406, IPC 120B, Calcutta High Court, Jakson Limited, State of West BengalSection 420
 22 Jun, 2026
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Jakson Limited & Ors. Versus State Of West Bengal & Anr.

  Calcutta High Court CRR 1487 OF 2023
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Case Background

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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Page 1 of 18

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

Page 2 of 18

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

Page 3 of 18

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

Page 4 of 18

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

Page 5 of 18

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.

Page 6 of 18

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

Page 7 of 18

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

Page 8 of 18

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

Page 9 of 18

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.

Page 10 of 18

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

Page 11 of 18

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

Page 12 of 18

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

Page 13 of 18

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

Page 14 of 18

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

Page 15 of 18

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

Page 17 of 18

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.]

Reference cases

Description

High Court Quashes Criminal Proceedings: When Commercial Disputes Should Not Become Criminal Cases

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.

Understanding the Dispute

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.

Issue: Drawing the Line Between Civil and Criminal Disputes

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.

Rule: Precedents on Criminalizing Civil Matters

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:

  • Indian Oil Corporation vs. NEPC India Limited and Others: This case emphasized that criminal proceedings should not be used as a shortcut or a tool of coercion for enforcing civil claims in commercial disputes.
  • G. Sagar Suri and Another vs. State of U.P and others: The Supreme Court held that the criminal process should not be allowed to degenerate into an instrument of harassment when the core dispute is essentially civil in nature.
  • V.Y Jose and Another versus State of Gujarat: This judgment clarified that disputes arising from contractual non-performance cannot be elevated to criminal offenses unless there is clear fraudulent intent at the inception of the transaction.
  • Sunil Bharti Mittal versus CBI: The court noted that vicarious liability does not generally apply in criminal law unless explicitly provided, particularly concerning summoning individuals based solely on their designation.
  • Kamal Shivaji Pokarnekar versus State of Maharashtra: This ruling guides that quashing criminal proceedings is appropriate only when the complaint fails to disclose any offense, or is frivolous, vexatious, or oppressive.
  • State of Karnataka versus M. Devendrappa: Outlined the situations where the High Court's inherent powers under Section 482 Cr.P.C. can be exercised, such as to prevent abuse of the court's process.
  • State of Haryana and Ors. vs. Bhajan Lal and Ors.: Provided specific parameters for quashing, including instances where the allegations, even if taken at face value, do not prima facie constitute an offense or are absurd and inherently improbable.

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.

Analysis: Applying the Law to Jakson Limited's Case

The High Court's analysis revealed that the complaint primarily stemmed from a commercial transaction, not a criminal one. The court observed:

  • Commercial Nature: The initial deal in 2011 was a business transaction where Kaiser Oils repeatedly failed to fulfill its part of the agreement (paying the balance and taking delivery).
  • Absence of Privity of Contract: There was no direct contractual relationship between Dollon's Food Products (the complainant) and Jakson Limited regarding the 2011 advance payment. The request for adjustment came from a separate group company, Kaiser Oils, years later.
  • Lack of Criminal Intent: The court found no evidence of dishonest intention on the part of Jakson Limited at the inception of the transaction (for Section 420 IPC) or entrustment of property followed by misappropriation (for Section 406 IPC). The petitioner's refusal to adjust the old advance was based on valid commercial reasons and a lack of record of the old amount for the new transaction.
  • Delay and Mala Fide Intent: The prolonged delay of nearly a decade in filing the complaint, coupled with the attempt to revive an old, unfulfilled transaction through a new entity, strongly suggested an ulterior motive to convert a stale civil claim into a criminal one, thereby abusing the legal process.
  • Purchaser's Non-Performance: The court noted that the complainant's own narrative indicated that the purchaser (Kaiser Oils, then Dollon's) failed to pay the balance consideration, which struck at the root of the transaction, absolving Jakson Limited of the obligation to dispatch.
  • Ingredients for Offenses Missing: Crucially, the court found that the allegations, even taken in their entirety, did not satisfy the essential ingredients required to constitute offenses under Sections 420 and 406 IPC.

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.

Conclusion: A Clear Stance Against Abuse of Process

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.

Why This Judgment is Crucial for Legal Professionals and Students

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.

Disclaimer

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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