Debangana Ray
Published July 25, 2022 at 19:19 IST
Recently the Karnataka High Court held that on the premise that civil proceedings take longer to culminate, criminal laws cannot be permitted to be set in motion for recovery of money as an easier route.
Justice M Nagaprasanna, in a recent order, quashed the proceedings initiated against the petitioner, Vilas Deore, managing director, Shriganesh Textiles and Infrastructure (India), Pune.
The complainant in the case is CB Ganapati, executive vice-president, Himatsingka, who had filed an FIR before Hassan Rural police in April this year for offences punishable under IPC for criminal breach of trust and cheating, among others.
Last year, Shriganesh Textiles and Himatsingka signed an agreement that said the latter would supply cotton bales to the former to convert them into yarn and return them.
In October 2021, a dispute arose over payment, retention and delivery of yarn.
When the dispute could not be amicably settled, the complainant sent a legal notice to the petitioner that it would invoke the Insolvency and Bankruptcy Code, 2016, if the amount was not settled.
On April 8, 2022, the complainant approached the Hassan police, alleging the petitioner was yet to pay more than 9 crore rupees for nearly 520 tonnes of cotton fibre.
The Court directed that, “Scuttling the said process and setting the criminal law in motion for recovery of the disputed money is not what the criminal law should be used for, as it would amount to misuse of criminal law as a shortcut to seek recovery of money that too without there being any ingredients of either section 406 or 420 of the IPC.”
The judge said the petitioner has indicated twice in mails that if the yarn was not lifted and payment not made, then they would sell it in the open market to meet their contingencies.
Hence, the allegation of misappropriation cannot be accepted.