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Supreme Court Ruling Protects Against Misuse of Criminal Law in Business Deals

In a significant ruling, the Supreme Court of India has drawn a clear line between civil disputes and criminal offences. The Court recently observed that mere non-payment of the sale price in a transaction does not amount to criminal breach of trust or cheating , reinforcing a crucial distinction between breach of contract and criminal conduct. Background of the Case The case involved a dispute where the complainant alleged cheating and criminal breach of trust because the buyer failed to pay the agreed sale price. However, the Supreme Court held that such matters should be handled under civil law unless there is concrete evidence of dishonest intent from the very beginning of the transaction. What the Supreme Court Said The bench clarified that for an act to be considered cheating under Section 415 of the Indian Penal Code (IPC), there must be fraudulent or dishonest intention at the time of the agreement itself . Simply failing to pay the agreed price does not fulfill this requ...