Calcutta High Court (Appellete Side)
M/S Kfc Intertional Limited & Ors vs M/S Colour Enterprises on 21 August, 2025
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction)
Appellate Side
Present:
Justice Bibhas Ranjan De
C.R.R. 600 of 2024
M/s KFC Intertional Limited & Ors.
Vs.
M/s Colour Enterprises
For the Petitioners :Mr. Sabyasachi Banerjee, Sr. Adv.
Mr. Anirban Dutta, Adv.
Mr. Aditya Roy, Adv.
Last Heard on :12.08.2025
Judgment on :21.08.2025
Bibhas Ranjan De, J.
1. This revision application has been preferred with a prayer for quashing the impugned proceedings chiefly predicated upon the substantial and determinative ground concerning 2 the manifest absence of privity of contract subsisting between the contending parties to this instant revision application.
2. Petitioner company dealing in engineering, procurement and construction services, was awarded a contract by Rail Vikas Nigam, for construction of Railway Project from Jhargram to Chakulia, West Bengal.
3. Petitioner company issued a purchase order to NAMCO Minerals and Metal Pvt. Ltd. for the purpose of that project. But NAMCO minerals performed part of the contract against which invoices were raised and payments were made. For non performance of contract several civil disputes cropped up between the petitioner company and NAMCO Minerals.
4. M/s NAMCO Minerals issued a letter upon the petitioner requesting payment of money to its contractor, directly, but the petitioner company refused to do so on the ground of privity of contract between the petitioner company and NAMCO Minerals.
5. Complaint company being a contractor under NAMCO Minerals worked for both petitioner company and NAMCO Minerals, but out of total GST invoices of Rs. 21,85,418.00/- 3 complainant company duly received payment of Rs. 5,50,000/-. Rest amount was not paid to complainant company in spite of service of demand notice upon NAMCO Minerals. Thereby complainant was deceived in furtherance of deep rooted conspiracy between petitioner company and NAMCO Minerals.
6. Accordingly one complaint was lodged before the Court of Ld. ACJM Raghunathpur, Purulia under Section 200 of CrPC which was registered as complaint case no. 67 of 2023 and cognizance of the offence was taken under Section 406/418/420 read with Section 120B of the Indian Penal Code. In turn the case was transferred to the Court of Ld. Judicial Magistrate, Raghunathpur, Purulia for disposal. After examination of witness on S/A, processes were issued against the petitioners. Being aggrieved the instant revision application has been filed.
7. In spite of service of notice opposite party did not contest the application.
Argument advanced:-
8. Mr. Sabyasachi Banerjee, Ld. Senior Counsel, appearing on behalf of the petitioners strenuously contended that there 4 was no privity of contract between the petitioners and the complainant company/opposite party herein, therefore question of breach of contract does not arise let alone any cheating.
9. Alternatively, Mr. Banerjee submits that even if allegation of complaint is accepted in its entirety no offence of cheating attracts while complainant company received part payment to the tune of Rs. 5,50,000/-.
Analysis:-
10. A complaint under Section 420 IPC for realization of a due amount, even with part payment, is unlikely to succeed if the initial transaction did not involve dishonest or fraudulent intent. Hon'ble Apex Court consistently held that were failure to repay a debt or fulfill a contractual obligation, specially when some payment has been made, does not automatically constitute cheating under Section 420. The core element of cheating i.e. dishonest inducement since inception of the transaction, must be established. It is now axiomatic, through several decisions of the Hon'ble Apex Court, that genuine business dispute or defaults in repayment of loans should be addressed through civil 5 remedies like a suit for recovery and not through criminal prosecution for cheating.
11. However, while a complaint under Section 420 of IPC can be filed in case of non-payment, it is crucial to demonstrate that the accused had a dishonest intention from the very beginning of the transaction and this intention induced the complainant to part with their money or property. The mere fact of non-payment or part payment is not sufficient to attract the offence of cheating.
12. In the case at hand, the complaint under Section 200 of CrPC failed to unveil any semblance of contractual privity between the petitioners and complainant company. In point of fact, the contractual nexus existed exclusively between complainant company/ opposite party herein and NAMCO Minerals/ a third party entity, which stood engaged by the petitioners for the execution of work order.
13. Given the complete and unequivocal absence of any contractual privity whatsoever between the complainant company/opposite party and petitioner company, it becomes manifestly untenable to suggest that the petitioners have committed, or could reasonably be alleged to have 6 committed, either any offence of cheating or the distinct yet equally culpable offence of criminal breach of trust let alone any offence defined in Section 418 of IPC.
14. As a sequel, the proceeding in connection with Complaint Case No. 67/2025 under Section 406/418/420/120B IPC now pending before the Court of Ld. Judicial Magistrate, Raghunathpore, Purulia, Stands quashed against petitioners only.
15. In the result, the instant revision application being no. CRR 600 of 2024 stands allowed.
16. Connected applications, if any, stand disposed of accordingly.
17. Interim order, if there be any, stands vacated.
18. All parties to this revisional application shall act on the server copy of this order duly downloaded from the official website of this Court.
19. Urgent Photostat certified copy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
[BIBHAS RANJAN DE, J.]