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SATISHCHANDRA RATANLAL SHAH VS. STATE OF GUJARAT AND ANOTHER
The Supreme Court on January 3, 2019, in the case of Satishchandra Ratanlal Shah v. State of Gujarat and Another, has held that mere failure to repay a loan would not automatically become a criminal offence unless there is criminal intent underlying the same.
A Division Bench comprising of Justices N.V. Ramana and M.M. Shantanagoudar passed an order clarifying this position while quashing charges of cheating and criminal breach of trust framed by an Additional Chief Metropolitan Magistrate in Gujarat.
In its order, the Supreme Court Bench said, ".we may note that there is nothing either in the complaint or in any material before us pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of section 405 punishable under Section 406 of the Indian Penal Code (IPC). Hence, the learned magistrate committed a serious error in issuing process against the appellants for the said offense. Unfortunately, the high court also failed to correct this manifest error," the Bench said.
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