While very rightly quashing the criminal proceedings against the Director Prakash Jha, the Jharkhand High Court in a most learned, laudable, landmark, logical and latest judgment titled Prakash Jha & Ors vs The State of Jharkhand & Anr in Cr.M.P. No. 1647 of 2018 that was pronounced as recently as on 08.02.2024 has minced just no words absolutely to hold in no uncertain terms that criminal courts are not meant to be used for settling scores or pressurize the parties to settle the dispute.

It must be noted that the complainant who is an authorized agent of Classic Multiplex Private Limited (Company), had entered into a written agreement with the accused Director/Producer Prakash Jha on behalf of Chairman-cum-Managing Director of the Company. As per the agreement, the Director had promised the company some area of his land for the construction of a multiplex. The complainant had also deposited bank drafts to the Director for the booking of the said land. However, the Director kept the money and did not make any bookings. The Single Judge Bench comprising of Hon’ble Mr Justice Sanjay Kumar Dwivedi very rightly observed that:
It is well settled that a breach of contract does give rise to criminal prosecution for cheating unless the fraudulent and dishonest intention is there in the beginning of the transaction. Merely on the allegation of failure to keep premises will not be enough to initiate criminal proceeding…Criminal Courts are not meant to use for settling the scores or pressurize the parties to settle the dispute. No denying it.

At the very outset, this brief, brilliant, bold and balanced judgment authored by the Single Judge Bench comprising of Hon’ble Mr Justice Sanjay Kumar Dwivedi of Jharkhand High Court sets the ball in motion by first and foremost putting forth in para 1 that:
Notice upon O.P. No.2 has already been effected in the year, 2019 however nobody appeared on behalf of O.P. No.2 till date in view of that this petition is being heard in absence of O.P. No.2.

While specifying the purpose of the petition, the Bench then discloses in para 4 that:
This petition has been filed for quashing the entire criminal proceeding including order taking cognizance dated 10.01.2018 in connection with Complaint Case No. 1499 of 2011, pending in the Court of the learned Chief Judicial Magistrate, Ranchi.

To put things in perspective, the Bench envisages in para 5 that:
The complaint case has been filed alleging therein that the complainant is the duly authorized Agent of the Chairman-cum-Managing Director of M/s. Classic Multiplex Private Limited. It is further alleged that the accused no.1 is the Director-cum-Producer of Indian film industry whereas the accused no.2 to 5 are the Directors of Holy Cow Pictures Pvt. Ltd. and they are responsible for day to day business of the said company.

It is alleged that the accused no.1 intended to establish a multiplex in Jamshedpur and for the same he made requisition before the State Government for allotment of land measuring an area of 3-4 acres and with the consent of the State Government and Tata Steel Ltd., 3.12 acres of land of plot nos. 13, 14 and 17 under khata no.2 under the notified area of Jamshedpur in Ward No.VI was allotted to him. It is further alleged that the accused no.1 approached the Chairman-cum-Managing Director of the complainant-Company, namely, Pawan Kumar Singh and promised him to give 10,000 sq. ft. of super built up area, which is going to be constructed at Jamshedpur. The accused No.1 entered into the written agreement on 13.06.2006 at Civil Court, Ranchi.

The Chairman-cum- Managing Director of the complainant got prepared three bank drafts of Rs.20 Lakh in the name of the accused no.1 and handed over the same to the accused No.1, who accepted the same. All the bank drafts were handed over to the accused No.1 in presence of the accused Nos.2 to 5. The complainant further alleged that on 28.05.2009, the Chairman-cum-Managing Director of M/s. Classic Multiplex Pvt. Ltd. went on the construction site to see the premises, which was booked by him, however, he was not allowed to enter into the premises.

The Chairman-cum-Managing Director of the complainant enquired from the supervisor, who was present on the work site where he has booked 10,000 sq. ft of super built up area on which the supervisor verified the records and informed him that there is no booking in his name. The Chairman-cum-Managing Director of the complainant thereafter approached the accused no.1 on 23.06.2009 and the accused no.1 also confirmed that there is no booking in his name..

It would be imperative to note that the Bench then points out in para 10 that, Admittedly, the complaint case has been filed alleging therein that three bank drafts to the tune of Rs. 20 lakh have been issued which was received by the accused no.1. In para 8 of the complaint petition itself it has been stated that accused no.1 is required to refund Rs. 10 crore because of breach of agreement which clearly suggests that if any case is made out that is civil in nature and for that criminal colour has been provided by the O.P. No.2.

Further from the document brought on record by way of supplementary affidavit it is crystal clear that the said bank drafts have not been encashed as yet and if encashment is not there the Court finds force in the argument of learned senior counsel for the petitioners as Section 25 of the Contract is attracted. In the light of Section 25 of the Contract Act in absence of any consideration the contract deemed to be void contract. Section 415 I.P.C. is definition of cheating. In the light of said definition to hold a person guilty of cheating it is necessary to show that he had fraudulent and dishonest intention at the time of making the promise. Consequence of not encashing of drafts in question suggests that intention from the very beginning was not there which is paramount consideration in a case arising out under section 415 I.P.C. and other sections with regard to the cheating.

Most significantly and most forthrightly as also most remarkably, the Bench mandates in para 12 propounding that:
It is well settled that a breach of contract does give rise to criminal prosecution for cheating unless the fraudulent and dishonest intention is there in the beginning of the transaction. Merely on the allegation of failure to keep premises will not be enough to initiate criminal proceeding. Further one fact is on the record which suggests that Title Suit No. 107 of 2009 was instituted by the O.P. No.2 which is still pending. Criminal Courts are not meant to use for settling the scores or pressurize the parties to settle the dispute. Whenever ingredients of criminal offences are made out criminal courts can take cognizance.

It is worth noting that the Bench notes in para 13 that:
In the case in hand F.I.R. has already been registered and pursuant to direction of the learned court police investigated the matter and submitted final form saying the case civil in nature. In this background the Court finds that the final form was rightly submitted saying the case civil in nature however, the learned court has taken cognizance on the basis of protest petition. Further the learned court in order taking cognizance has stated that the case is arising out of breach of agreement inspite of that he has taken cognizance.

As a corollary, the Bench then points out in para 14 that:
In view of above facts, reasons and analysis the Court comes to the conclusion that if criminal proceedings are allowed to be continued against the petitioners before the learned court will amount to the abuse of process of law.

Further, it would be vital to also note that the Bench then aptly notes in para 15 that:
Accordingly, the entire criminal proceeding including order taking cognizance dated 10.01.2018 in connection with Complaint Case No. 1499 of 2011, pending in the Court of the learned Chief Judicial Magistrate, Ranchi, is quashed.

In addition, the Bench then also directs in para 16 that:
This petition is allowed and disposed of. Pending I.A, if any, stands, disposed of. Interim order is vacated.

Finally and for sake of clarity, the Bench then concludes by holding and clarifying in para 17 that:
The Court has not opined on the merit of pending Title Suit and that will be decided in accordance with law without prejudice to this order.

All said and done, the Jharkhand High Court has made it unequivocally clear that criminal courts are not meant to be used for settling the scores or pressurizing the parties to settle the dispute. This was held so most explicitly by the Ranchi High Court while quashing the criminal proceedings against the Director Prakash Jha. It thus merits no reiteration that all the criminal courts must pay heed to what the Jharkhand High Court at Ranchi has held so explicitly, elegantly, eloquently and effectively in this leading case. There can be just no denying or disputing it.

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh