In the recent case of Ruchika Kakar v. The State of Jharkhand, the petitioner, a director at Ritebanc Agritech Solution Pvt. Ltd., sought to quash criminal proceedings initiated against her. The case arose from an agreement where the company’s managing director procured rice from the complainant worth Rs. 1,67,50,573/-. While a partial payment of Rs. 34,60,000/- was made, the remaining amount was left unpaid, prompting the complainant to file a case after being informed to forget the dues. Subsequently, the petitioner filed a criminal miscellaneous petition under Section 482 of the Criminal Procedure Code (CrPC) to nullify the criminal proceedings and the judicial magistrate’s order, which took cognizance of offenses under Sections 406 and 420/34 of the Indian Penal Code (IPC).
Petitioners’ Arguments
The petitioner contended that there were no direct allegations against her and that her inclusion in the case was solely due to her position as a director. She argued that not every breach of contract constitutes cheating unless deception was intended from the very beginning. The petitioner referenced several legal precedents to bolster her argument, including Ashok Agrawal & Ors. vs. The State of Jharkhand & Anr., Uma Shankar Gopalika vs. State of Bihar & Anr., Satish Chandra Ratanlal Shah vs. State of Gujarat & Anr., and Ravindranatha Bajpe vs. Mangalore Special Economic Zone Ltd. & Ors.
State’s position
The state argued that the complaint and witness testimonies indicated that the petitioner met the complainant at the Mumbai office, suggesting her active involvement and criminal intent. This, according to the state, provided sufficient grounds to implicate the petitione
Court’s Observations
The Hon’ble Court noted the established legal principle that for an individual to be charged alongside a company, there must be clear evidence of their involvement in the offense and their criminal intent. Alternatively, the doctrine of vicarious liability must be present in the statutory framework.
The court emphasized that merely meeting the complainant does not constitute sufficient evidence of the petitioner’s active role in the alleged crime. The court further elaborated that for an offense under Section 420 of the IPC (cheating) to be made out, deception must be present at the inception. If the intent to deceive developed later, it does not qualify as cheating. In this case, since partial payment had already been made and no initial deception was alleged, the charge of cheating was not substantiated.
Additionally, for a charge of criminal breach of trust under Section 406 IPC to hold, it is insufficient to merely show that the money was retained by the accused. It must also be shown that the accused dishonestly misappropriated or retained the money.
Court’s Decision
Considering these factors, the court concluded that neither the offense under Section 420 nor Section 406 IPC was made out against the petitioner. Consequently, the court quashed the criminal proceedings and set aside the judicial magistrate’s order. This ruling underscore the need for a clear legal framework regarding vicarious liability to ensure that individuals are not unfairly charged in corporate-related offenses without sufficient evidence of their direct involvement or criminal intent.
Case Title: Ruchika Kakar v. The State of Jharkhand
NAME: KINJAL PANIGRAHY, COURSE: BBA LLB, COLLEGE: NATIONAL LAW UNIVERSITY, ODISHA, INTERN UNDER LEGAL VIDDHIYA
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