The State of Karnataka v. Naresh Kumar: Quashing of FIR

In the case of the State of Karnataka v. Naresh kumar & Anr., the appellants challenged the order of the Karnataka High Court dismissing their petition to quash the FIR. The dispute, primarily civil in nature, relates to payment disagreements in a bike assembly contract. The High Court’s focus on criminal intent was disputed, leading to the successful appeal and stay on criminal proceedings. Find out more about this significant legal development.

Facts

The appellants challenged the order dated 02.12.2020 of the Karnataka High Court which dismissed their petition under Section 482 of the Criminal Procedure Code for quashing the FIR.
The appellants argued before the High Court that the FIR filed by the complainant is primarily a civil dispute with no criminal element, labeling the criminal proceedings as an abuse of process, and sought relief under Section 482 of the Criminal Procedure Code.
A Chargesheet dated 30.05.2019 was filed, making both appellants accused in the case.
The complainant, Actual Name, was contracted for bike assembly, transport, and delivery at Rs.122 per bicycle, and invoiced Rs. 1,01,58,574 for assembling 83,267 bicycles, expecting full payment.
However, the appellants allegedly paid only Rs.35,37,390, leading to allegations of criminal breach of trust and cheating.
The First Information Report No. 113 of 2017 was filed against Appellant No. 1 on 24.05.2017 under Sections 406, 420, and 506 of the Indian Penal Code at P.S. Doddaballapura, Bangalore Rural District.

Also Read: Legal Analysis of Retroactive Legislation in FSS Act Case

Analysis

The dispute between the parties is primarily civil in nature, revolving around the number of bicycles assembled and the resulting payment disagreements.
The settlement was primarily aimed at resolving the dispute, bringing peace, and avoiding litigation.
The payment of an additional amount by the appellants as per the settlement does not automatically imply cheating.
The appellants, being company officials, coercing the complainant into a settlement seems unlikely.
The High Court failed to acknowledge the civil nature of the dispute and erroneously focused on potential criminal intent.
The High Court’s interpretation of the appellants’ payment as evidence of cheating is disputable.
Every breach of contract does not give rise to the offence of cheating, fraudulent or dishonest intention is required to be shown at the time of making the promise.
Dispute between the parties in the case at hand was civil in nature and later settled.
High Court should exercise caution while using jurisdiction under Section 482 of the Code of Criminal Procedure to prevent abuse of process or secure ends of justice.
Disputes essentially of a civil nature camouflaged as criminal offences can be quashed using inherent powers under Section 482 of the Code.
A mere breach of contract does not always lead to criminal prosecution as highlighted in Sarabjit Kaur v. State of Punjab and Anr.
High Court should intervene and quash criminal proceedings in cases where civil remedies are available to prevent abuse of court process.
Inherent powers under Section 482 should be used sparingly but not hesitated to quash criminal proceedings essentially of a civil nature.