Supreme Court Emphasizes Distinction Between Breach of Contract and Criminal Offences; Stresses Thorough Evaluation Needed.

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....The Supreme Court quashed the summoning order issued for offences u/ss 406, 420 and 120B of the Indian Penal Code, 1860, emphasizing the non-application of mind by the lower courts. It clarified the distinction between criminal breach of trust and cheating, stating that vicarious liability cannot be attributed to office bearers for these offences unless a statutory provision exists. Mere breach of contract or trust does not constitute criminal breach of trust or cheating unless fraudulent intention is proven from inception. In sale of goods, failure to pay consideration cannot amount to criminal breach of trust as the property passes to the purchaser upon delivery. The magistrate and police must carefully apply their mind to ascertain if allegations genuinely constitute these offences before taking cognizance or registering FIR.....