Breach of agreement: HC quash pending criminal proceedings against company

Kolkata: Quashing pending criminal proceedings at the lower court against a private builder company in a case relating to breach of agreement, Calcutta High Court said it failed to understand how the police slapped criminal sections under IPC in its chargesheet in absence of any evidence.

The Bench of Justice Suvra Ghosh was hearing the petitioners, directors of a private builder company, who sought to quash proceedings against them pending before the Metropolitan Magistrate 9th Court in the city. Their counsel submitted that the complaint was lodged after an inordinate and unexplained delay of about eight years. The petitioner’s company entered into an agreement for sale with a private opposite party in 2009 concerning a plot. The total consideration was decided at Rs 1,20,00,000. The opposite party was liable to pay the amount in installments with the first being Rs 45,00,000.

One of the clauses of the agreement was that failure to make payment of any one installment within the stipulated time frame will allow the owner/developer to cancel the agreement or condone such default upon charge of two per cent per month on the outstanding amount compounded monthly. After the initial payment, the opposition party failed to pay the other instalments but lodged a complaint against the petitioners under Sections 120B/420/406 of IPC. They alleged the petitioners failed to register the sale deed despite repeated communications and payment of the first instalment.

The state counsel said the FIR stated, the petitioners sold out the plot to others and therefore cheated the complainant.

The charge sheet records the petitioners misappropriated the complainant’s first paid instalment and were absconding due to which they couldn’t be arrested.

The court observed that the opposite private party failed to honour the agreement and no evidence was produced against plots being sold out long back. Neither was there evidence against non-registration of the deed.

Quashing the proceedings pending at the lower court, HC observed: “This Court is inclined to hold that the complaint or the attending circumstances of the case do not disclose any criminal offence, far less an offence under section 120B/420 of the Indian Penal Code and continuation of such proceeding shall amount to abuse of the process of law”.