Criminal law can’t be recovery mechanism in commercial cases, says Calcutta High Court

The Calcutta High Court recently ruled that a criminal case against a company and its executives cannot be used as a recovery mechanism in commercial disputes. Justice Uday Kumar dismissed a plea that sought to quash criminal proceedings, stating that a criminal court cannot summon directors or senior management officers solely based on their high office within a company.

The court emphasized that a criminal case cannot be used to exact commercial pressure or serve as a recovery tool. The complainant alleged that the accused company supplied defective goods, leading to financial losses. However, the court found that the case was predominantly civil in nature, involving product quality, warranty replacements, and a disputed advance payment, without any evidence of initial fraudulent intent. Consequently, the high court quashed the criminal case and proceedings against the company.