Raghupathy (Petitioner) filed a complaint against Roshesh and Raj (accused) alleging that both of them induced him to become consignment agent of their Company, for supply of medicines in south Kerala region. On their in

The facts of the given situation are similar to the case Shruti Enterprises v. State of Bihar and ors. In this case, it was held that mere breach of contract cannot give rise to criminal prosecution under section 420 unless fraudulent or dishonest intention is shown right at the beginning of transaction when the offence is said to have been committed. If it is established that the intention of the accused was dishonest at the time of entering into the agreement, then liability will be criminal and the accused will be guilty of offence of cheating. On the other hand, if all that is established is that a representation made by the accused has subsequently not been kept, criminal liability cannot be fastened on the accused and the only right which complainant acquires is to a decree of damages for breach of contract. The complaint petition in this case shows that after the execution of the agreement, Roshesh and Raj regularly supplied the medicines for next 1 year and Raghupathy had no grievance till then. It indicates that intention of Roshesh and Raj was not dishonest or fraudulent at the time when the parties entered into the agreement. As the discontentment and issue arose subsequently since the opposite party did not keep their promise, their action is not liable to be deemed criminal going by the judgement passed in the case referred here. In view of the above, it can be said that, even if the entire facts disclosed in the complaint petition are taken to be true; no offence under Section 420/34 of Indian Penal Code, 1860 can be made out against Roshesh and Raj as it is a case of breach of contractual obligation.