Civil Dispute, Not Crime: SC Quashes FIR Against Businessman Calls It a Contract Issue
The Supreme Court quashed an FIR alleging cheating (Section 420 IPC) and criminal breach of trust (Section 406 IPC), holding that unpaid export transactions constituted a civil dispute, not a criminal offense. The Court emphasized that mere breach of contract, without dishonest intent at inception, cannot attract criminal liability. It ruled that the exporter (M/s. Oswal Overseas), not the accused, was the entrusted party, and the complainant failed to establish fraudulent inducement or entrustment under Sections 405/415 IPC. The judgment reaffirmed that criminal proceedings cannot remedy purely contractual disputes.
Facts Of The Case:
The case involved a business dispute between Ashok Kumar Jain (appellant), director of a Sri Lankan export-import firm, and a Gujarat-based textile trader...