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Criminal Complaint for suppression facts of contract & Dispute of Recovery of dues

April 29, 2025 legaldeli

Accused No.1 Company had taken contract from NBCCL and sub-let a portion of the work to the respondent no.2 herein.

Since payments were due, respondent no.2 intervened in the proceedings between accused no.1 Company and NBCCL in the High Court. However, this was declined on the ground that there was no contract with the respondent no.2 and the contract with NBCCL clearly provided a restrict covenant against sub-letter the contract without consent of NBCCL.

Respondent no.2 filed a criminal complaint for cheating under Sections 420, 467, 468 and 471 read with section 34 of the IPC.

The High Court, merely relying upon negative covenant in the contract, held that there is suppression of material facts which amounts to dishonest and fraudulent action.

HELD that while the complainant was aware of the fact, at the inception itself, that they were entering into a contract to do a portion of the work of NBCCL given to the accused no.1 company. While the complainant alleges suppression, obviously the complainant did not make any effort to look into the contract between the accused no.1 and NBCCL.

In any event, even if we assume that the sub-contract was without a consent from the principal and that the restrictive covenant was suppressed from them, it would only entail an action by NBCCL, as against accused no.1 company. NBCCL cannot take any action against the complainant since it has no privity of contract with the complainant.

We do not find any criminality arising from the allegations and prima facie the allegations do not constitute any offence or make out any case against the accused persons.

The complainant would have to take legal remedy for recovery of money which is the crux and essence of the allegations in the complaint. In fact, the complainant had taken steps for recovery but it has been stalled due to insolvency moratorium.

Judgment dated 28.4.2025 of the Supreme Court of India in SLP [Criminal] No.15413 of 2023 of Aaditya Khaitan @ Aditya Khaitan and others Vs. The State of Jharkhand and others

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