The Calcutta High Court recently dismissed an FIR filed against an individual, clarifying that business disputes over outstanding payments should not be treated as a criminal matter. Justice Ajay Kumar Gupta's bench emphasised that allegations of non-payment in business transactions or breaches of contract cannot be automatically classified as fraud or criminal breach of trust. The court also warned against the misuse of criminal law to pressure parties into paying money.
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Civil disputes should not be treated as criminal cases
Lawyers say this judgment could set a precedent for dismissing similar cases in the future. They point out that disputes ranging from land and property issues to breaches of commercial agreements often lead to criminal cases, even though civil litigation is the proper channel. Filing criminal complaints in such instances raises questions about the role of the police and can result in harassment for both law enforcement and the accused. The High Court’s decision is expected to curb the trend of using criminal cases as leverage for debt recovery, preventing delays in genuine criminal trials.
Long-standing business relations and pending dues
The case involved Pradyot Samanta, a poultry feed trader from Arambagh, who applied to the High Court to dismiss an FIR against him. The court observed that there was no evidence suggesting any dishonest intent to defraud at the start of the transactions. The parties had a long-standing business relationship, conducting regular transactions through cash, cheques, and bank transfers.
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Documents showed that between April 2013 and March 2014, the transaction amount exceeded ₹1 crore, of which more than ₹75 lakh had been settled. Business continued until July 2016. The complainant alleged that around ₹40 lakh remained unpaid for over a year, prompting a criminal case at Arambagh police station, followed by a chargesheet.
The complainant argued that the issue was purely a private business matter and that civil proceedings should have been the proper route for recovering dues. The court agreed, stating that having outstanding money alone does not amount to intentional fraud or fraudulent inducement. Dismissing the FIR, the court noted that pursuing criminal proceedings in this case would constitute a misuse of the law. Consequently, both the FIR and the criminal case pending in the Arambagh court were dismissed.
