IN THE HIGH COURT AT CALCUTTA CRIMINAL REVISIONAL JURISDICTION APPELLATE SIDE PRESENT: THE HON’BLE JUSTICE UDAY KUMAR CRR 2307 OF 2024 NDM SEAFOOD PROCESSORS PVT. LTD. & ORS. -VS- STATE OF WEST BENGAL & ANR. For the Petitioners : Mr. Sukanta Chakraborty, Mr. Zubair Ahamed, Mr. Subhajit Nandi, Mr. Ronit Deyashi, Mr. Partho Sarathi Biswas For the Opposite Party No. 2 : Mr. Soumya Nag Reserved on : 23.09.2026 Pronounced on : 29.09.2026 UDAY KUMAR, J.: – 1. By this criminal revisional application filed under Section 482 of the Code of Criminal Procedure, 1973 (corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023), the petitioners have approached this Court invoking its inherent jurisdiction for quashing of the criminal proceedings arising out of C.S. No. 7164 of 2023 (Sudarshan Bengani v. NDM Seafood Processors and Exporters Pvt. Ltd. and Ors.), pending before the Learned 19th Metropolitan Magistrate at Kolkata, including the order dated June 19, 2023, whereby process was issued against them for offences under Sections 406, 411, 417, 418, 2 CRR 2307 OF 2024 420, 422 read with Sections 120B and 34 of the Indian Penal Code, 1860. 2. To examine the matter in its proper perspective, it is necessary to trace the foundational facts in their logical sequence. Petitioner No. 1 is a company incorporated under the Companies Act carrying on the business of seafood processing, with Petitioner Nos. 2 and 3 as its directors, whereas Opposite Party No. 2 is the proprietor of M/s. Refrigeration Trade Impex, dealing in refrigeration and sanitation equipment. Sometime in 2021, Opposite Party No. 2 approached the petitioners, assuring them of quality supplies and prompt delivery. Believing these representations, the petitioners placed orders for equipment, including a knee-operated handwash station. 3. However, the commercial relationship immediately hit a roadblock upon delivery, as the petitioners discovered that the supplied goods were defective, malfunctioning, and of substandard quality. Acting with utmost commercial bona fides, the petitioners addressed a detailed email on May 7, 2022, apprising Opposite Party No. 2 of the technical defects, requesting a refund of the principal amount of Rs. 3,54,290/-, and claiming an additional sum of Rs. 50,000/- incurred towards repairs. Despite subsequent follow-ups and unfulfilled verbal assurances of settlement, no redressal was forthcoming from the Opposite Party no. 2, prompting a further email reminder on April 21, 2023. Instead of resolving the legitimate commercial grievances, Opposite Party No. 2 caused a statutory demand notice dated April 28, 2023, to be issued through counsel, demanding an alleged outstanding 3 CRR 2307 OF 2024 sum of Rs. 2,83,617/-. Thereafter, as a counterblast and to pre-empt accountability for substandard supplies, Opposite Party No. 2 instituted the impugned complaint case. The Learned Magistrate, upon a perfunctory examination under Section 200 Cr.P.C. on June 19, 2023, mechanically took cognizance and issued process. Furthermore, it is a matter of record that one Swati Poddar has been arbitrarily arraigned in the criminal proceeding as a director of the petitioner company, notwithstanding official records from the Registrar of Companies establishing that she holds no such position. 4. Mr. Sukanta Chakraborty, learned counsel appearing for the petitioners vehemently contends that the entire criminal proceeding is an abuse of the process of the court, being a malicious counterblast designed to penalize the petitioners for raising legitimate grievances regarding defective goods and to coerce them into submission. It is urged that the dispute between the parties is purely civil and commercial in nature, arising out of a contract for sale and purchase of goods. Counsel submits that to sustain a charge of cheating under Section 420 IPC, the ingredients of fraudulent or dishonest inducement ab initio (from the very inception of the transaction) must be established, whereas the admitted existence of business dealings, running accounts, and part- transactions completely negates any element of deception from day one. It is further argued that the ingredients of criminal breach of trust under Section 406 IPC are completely absent, as the delivery of goods pursuant to a commercial contract passes dominion over the property, converting any monetary dispute into a civil claim for recovery of debt. 4 CRR 2307 OF 2024 Reliance is placed on the settled position of law that criminal machinery cannot be pressed into service as a shortcut for recovering civil dues or settling commercial scores. 5. In support of his contentions regarding the mechanical implication of directors and the wrongful arraignment of individuals without basis, learned counsel places specific reliance on paragraph 13 of Maksud Saiyed & Ors. v. State of Gujarat [(2008) 5 SCC 668]. Furthermore, to assail the manner in which process was issued by the learned Magistrate, he relied upon Pepsi Foods Limited and Another v. Special Judicial Magistrate and Others [(1998) 5 SCC 749], drawing specific attention to paragraph 28, in support of his contention that: "28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course... The Order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof... The Magistrate has to carefully scrutinize the evidence brought on record…." 6. Additionally, relying upon the recent pronouncement in Delhi Race Club (1940) Ltd. & Ors. v. State of Uttar Pradesh & Anr. [(2024) 10 SCC 690] (specifically paragraphs 15 and 35), counsel submits that offences under Section 406 and Section 420 of the IPC are mutually exclusive and cannot co-exist together on the same set of allegations. 7. Per contra, Mr. Soumya Nag, learned Counsel for the Opposite Party No. 2 contends through the petition of complaint that the petitioners 5 CRR 2307 OF 2024 induced the complainant to supply goods by making false assurances of prompt payment, but thereafter failed and neglected to clear the outstanding balance, thereby simultaneously committing offences of cheating and criminal breach of trust. 8. To counter the contentions and legal precedents cited by the petitioners, learned counsel for the opposite party places reliance on a series of authoritative pronouncements: Medchl Chemicals & Pharma Pvt. Ltd. v. Biological E. Ltd. & Ors. [(2000) 3 SCC 269] (paragraph 5); Lee Kun Hee & Ors. v. State of Uttar Pradesh & Ors. [(2012) 3 SCC 132] (paragraphs 23, 65, 66, 73, 74); Rajesh Bajaj v. State NCT of Delhi & Ors. [(1999) 3 SCC 259] (paragraphs 3, 6, 9, 11, 12); State of M.P. v. Awadh Kishore Gupta & Ors. [(2004) 1 SCC 691] (paragraph 13); and S.W. Palanitkar & Ors. v. State of Bihar & Anr. [(2002) 1 SCC 241]. 9. Distinguishing the applicability of the ratio laid down in Pepsi Foods (supra), learned counsel for the opposite parties submits that while summoning an accused is indeed a serious judicial act, the facts of the present case relate to commercial default and evasion of payment, which are fundamentally distinct from the factual matrix of Pepsi Foods (supra), rendering its ratio inapplicable here. As regards the reliance placed by the petitioners on Delhi Race Club (supra), the opposite party contends by way of distinction that charges can be framed alternatively, that the intention of deception was present from the inception of the transaction, and that all disputed questions of fact are triable in nature and should not be throttled at the threshold. 6 CRR 2307 OF 2024 10. Having heard the learned counsel for the petitioners and perused the materials on record, the primary questions that fall for determination before this Court are: i. Whether the dispute between the parties is purely civil and commercial in nature, arising out of a product-quality dispute, and whether the essential ingredients of cheating under Section 420 of the IPC (specifically, dishonest or fraudulent inducement ab initio) are prima facie made out or are distinguishable from the ratios cited by the opposite party? ii. Whether the simultaneous invocation of Section 406 and Section 420 of the IPC is legally sustainable in a commercial transaction, and whether the mechanical issuance of process against the petitioners including the arbitrary arraignment of individuals contrary to official Registrar of Companies (ROC) records violates the established safeguards against the abuse of criminal process as laid down in Pepsi Foods and Maksud Saiyed? 11. Now, coming to the first question for discussion on the facts of this case in the light of the judicial precedents cited by the respective parties, I have carefully examined the rival submissions and the plethora of case laws pressed into service. Learned counsel for the opposite party has strongly relied upon the principles laid down in Rajesh Bajaj (supra), Medchl Chemicals & Pharma (supra), and Lee Kun Hee (supra) to contend that the existence of a civil remedy or a commercial transaction does not bar criminal prosecution, that deception can be gathered from 7 CRR 2307 OF 2024 subsequent conduct of non-payment, and that disputed questions of fact regarding intention should not be throttled at the threshold. 12. However, upon a close evaluation of the ratios in those cited authorities and a critical comparison with the factual matrix of the present case, I find that the principles relied upon by the opposite party are clearly distinguishable. In cases such as Rajesh Bajaj (supra) and Medchl Chemicals (supra), the accused persons had induced the complainants to supply goods or services under the cloak of commercial dealings but had completely absconded, avoided communication, or maintained total silence right from the beginning without ever raising any contemporaneous grievance as to product quality, thereby exhibiting a clear deceptive design ab initio. 13. In stark contrast, the facts of the present case present a fundamentally different picture. The petitioners did not ghost the vendor or silently enjoy the supplies without acknowledgment. Instead, they acted with absolute commercial bona fides by immediately flagging technical defects upon delivery of the products and addressing detailed emails specifically on May 7, 2022, and April 21, 2023 long before the initiation of the criminal complaint, wherein they categorically demanded refunds for the defective refrigeration equipment and claimed repair costs. Where a purchaser rejects goods or raises contemporaneous, documented objections regarding substandard quality, the subsequent withholding of payment or a dispute over ledger balances sounds purely a civil claim for recovery or a breach of warranty under the Sale of Goods Act, 1930 and cannot be elevated to a 8 CRR 2307 OF 2024 criminal offense of cheating. In the absence of any material demonstrating a dishonest intention of the petitioners from the very inception of the transaction, stretching a standard commercial default into a criminal prosecution, fastening the offence of cheating under Section 420 IPC upon the petitioners, amounts to an abuse of the judicial process. 14. Therefore, on this first question, I have no hesitation in concluding that the dispute between the parties is entirely civil and commercial in character, arising out of reciprocal disagreements over product performance and commercial ledger accounts. The essential legal ingredient of ab initio fraudulent deception under Section 420 IPC is completely absent, and the ratios of the judgments cited by the opposite party are clearly factually distinguishable and thus, are inapplicable to the distinctive factual matrix of this case. 15. Now, turning to the second and final question for discussion, to address it, I must evaluate the rival contentions and the specific judicial authorities cited by the petitioners, namely Delhi Race Club (1940) Ltd. (supra), Pepsi Foods Limited (supra), and Maksud Saiyed (supra), alongside the rival submissions advanced by the opposite party. 16. On the issue of simultaneous charges under Sections 406 and 420 of the IPC, the opposite party contended that charges can be framed alternatively and that matters should not be throttled at the threshold. However, this argument overlooks the definitive and binding ratio laid down by the Hon’ble Supreme Court in Delhi Race Club (supra). As observed in paragraphs 15 and 35 of the said judgment, the offences of 9 CRR 2307 OF 2024 criminal breach of trust under Section 406 IPC and cheating under Section 420 IPC are fundamentally contradictory and mutually exclusive in the context of a contractual or commercial dealing, as such cannot co-exist on the same set of contractual allegations. Section 420 requires a fraudulent or dishonest inducement ab initio (from the very inception), whereby property is delivered based on deception, whereas Section 406 presupposes a lawful entrustment of property where dominion is handed over voluntarily. In the present case, since the goods were delivered pursuant to a standard commercial purchase order, the foundational element of "entrustment" required for Section 406 is entirely missing. 17. Furthermore, examining the manner in which process was issued, the opposite party sought to distinguish the ratio of Pepsi Foods Limited (supra) by arguing that commercial defaults stand on a different footing. This distinction is legally untenable. As emphasized by the Apex Court in paragraph 28 of Pepsi Foods (supra), summoning an accused in a criminal case is a serious matter, and a Magistrate cannot act as a silent spectator or rubber-stamp a complaint without meticulously scrutinizing the oral and documentary evidence. In the present case, issuance of process for both offences simultaneously on an identical set of commercial default facts demonstrates a complete non-application of mind. 18. Compounding this error is the arbitrary arraignment of individuals such as Swati Poddar, as directors, despite official records from the Registrar of Companies (ROC) conclusively establishing that they hold 10 CRR 2307 OF 2024 no such position in the company. This brings into direct operation the salutary principle enunciated in paragraph 13 of Maksud Saiyed (supra), wherein the Supreme Court held that vicarious liability cannot be fastened on directors or individuals associated with a company in a routine or mechanical manner without specific, individualized averments detailing their active participation in a criminal act. A company is a distinct legal entity, and standard commercial disputes cannot be utilized as a tool to rope in family members or personnel unconnected with day-to-day management. In the case at hand, the Learned Magistrate mechanically took cognizance and issued process without verifying whether the essential ingredients of criminal culpability were disclosed against the corporate entity or its management. 19. Therefore, upon analysing this second question, I have no hesitation in concluding that the simultaneous invocation of Sections 406 and 420 IPC is legally unsustainable, that the mechanical issuance of process violates the mandatory judicial safeguards set out in Pepsi Foods (supra) and Maksud Saiyed (supra), and that the prosecution is a clear abuse of the process of law. 20. Upon a comprehensive evaluation of the factual matrix, the rival submissions, and the settled legal precedents, this court arrives at the following conclusions that: i. a commercial dispute arising out of the supply of goods where contemporaneous, documented objections regarding product defects and substandard quality were raised by the purchaser, 11 CRR 2307 OF 2024 cannot be legally converted into a criminal prosecution for cheating under Section 420 IPC, as the essential ingredient of ab initio deception is completely absent. ii. the simultaneous invocation of Section 406 (criminal breach of trust) and Section 420 (cheating) of the IPC in a standard contractual default is legally unsustainable and mutually exclusive, as established in Delhi Race Club (supra). iii. the mechanical issuance of process by a Magistrate without independent judicial scrutiny of foundational criminal elements violates the mandatory safeguards laid down in Pepsi Foods Ltd (supra). iv. the routine and arbitrary arraignment of individuals (including persons not employed as directors, per official Registrar of Companies records) runs directly foul of the principles governing corporate vicarious liability as enunciated in Maksud Saiyed (supra). v. when criminal machinery is set in motion as an afterthought counterblast to coerce a party facing civil/commercial demands, it constitutes a gross abuse of the process of the court, warranting interference under Section 482 of the Code of Criminal Procedure, 1973 (corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023). 21. In view of the foregoing analysis and findings, the criminal revision succeeds, C.R.R. No. 2307 of 2024 is allowed. 12 CRR 2307 OF 2024 22. The criminal proceedings relating to C.S. No. 7164 of 2023, pending before the 19th Court of the Learned Metropolitan Magistrate at Kolkata, including the order dated June 19, 2023, issuing process and all consequential orders, are hereby quashed and set aside qua the petitioners. 23. Connected pending application, if any, stands disposed of accordingly. 24. Interim order, if any, stands vacated. 25. There shall be no order as to costs. 26. Trial Court Records, if called for, shall be transmitted down along with a copy of this judgment immediately to the learned Trial Court for information and necessary compliance. 27. Case diary, be returned to the Learned Counsel for the State. 28. Urgent photostat certified copy of this judgment, if applied for, be supplied to the parties upon compliance with all requisite formalities. (Uday Kumar, J.)