This case of Aaditya Khaitan Aditya Khaitan & Others v/s The State of Jharkhand & Others., concerns an appeal against a High Court's refusal to quash an FIR under Section 482 of the Code of Criminal Procedure, 1973 (Cr.PC). The appellants, a company and its officers, sought to quash an FIR that they argued was a strong-arm tactic for debt recovery. This debt is part of a contractual dispute currently in arbitration, which is stayed due to insolvency proceedings and a moratorium order by the National Company Law Tribunal.

The core of the allegations is that the appellant company, after securing a contract from NBCCL (National Building Construction Corporation Limited), sublet a portion of the work to the complainant. This arrangement encountered issues, leading to stalled work and unpaid bills. The complainant attempted to intervene in a High Court proceeding between the appellant company and NBCCL but was denied due to a restrictive covenant in the original contract prohibiting subletting without NBCCL's consent. The complainant alleged this fact was suppressed, leading to charges under various sections of the Indian Penal Code, 1860, including Sections 406, 420, 467, 468, and 471 read with Section 34.

While the High Court quashed the FIR against the Deputy General Manager of NBCCL, it refused to do so for the appellants, stating that a prima facie offense could not be ruled out. However, the Supreme Court, upon reviewing the complaint, determined that the allegations primarily constitute a commercial dispute concerning payments due under a contract. Even if the restrictive covenant regarding subletting was suppressed, the complainant later became aware of it and continued working. The Court emphasized that such a breach would primarily concern NBCCL and the appellant company, not necessarily constitute a criminal offense.

The Court found that the allegations, even when taken at face value, did not prima facie constitute any criminal offense. The steps taken by the complainant for recovery of dues (arbitration, NCLT application) reinforce the nature of the dispute as civil. Therefore, the Supreme Court concluded that the High Court erred in not exercising its power under Section 482 Cr.PC and quashed the FIR, stating no further proceedings would be taken.

Section 34., Indian Penal Code - 1860  

Section 406., Indian Penal Code - 1860  

Section 420., Indian Penal Code - 1860  

Section 467., Indian Penal Code - 1860  

Section 468., Indian Penal Code - 1860  

Section 471., Indian Penal Code - 1860  

Indian Penal Code, 1860  

Section 482., Code of Criminal Procedure - 1973  

Code of Criminal Procedure, 1973