{"id":392946,"date":"2026-08-11T10:00:30","date_gmt":"2026-08-11T04:30:30","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=392946"},"modified":"2026-08-11T09:39:49","modified_gmt":"2026-08-11T04:09:49","slug":"delhi-high-court-stays-fir-spm-chemicals-commercial-dispute","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/08\/11\/delhi-high-court-stays-fir-spm-chemicals-commercial-dispute\/","title":{"rendered":"Delhi High Court stays FIR against SPM Chemicals &amp; Minerals in &#8377;1.75 crore dispute; holds breach of contract cannot be forcefully converted into criminal action"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\"><span style=\"font-weight: bold;\">Delhi High Court:<\/span> In a petition challenging the order directing registration of an FIR under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-9001803878\" target=\"_blank\">175(3)<\/a>, <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-9001804327\" target=\"_blank\">Nagarik Suraksha Sanhita, 2023<\/a> (BNSS), a Single Judge Bench of <span style=\"font-weight: bold;\">Purushaindra Kumar Kaurav, J.<\/span>, stayed the operation, implementation and execution of the impugned order, observing that a simple commercial dispute arising out of alleged deficiency in supply of goods appeared to have been forcefully converted into a criminal action. Relying on <span style=\"font-style: italic;\">Indian Oil Corpn.<\/span> v. <span style=\"font-style: italic;\">NEPC India Ltd.<\/span>, <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0000038064\" target=\"_blank\">(2006) 6 SCC 736<\/a>, the Court reiterated that the growing tendency in business circles to convert purely civil disputes into criminal cases and settle civil disputes and claims by applying criminal prosecution should be deprecated and discouraged. Finding that the impugned order was <span style=\"font-style: italic;\">ex facie perverse<\/span> and did not prima facie indicate what offence had been made out against the petitioners, the Court observed that the order appeared to be <span style=\"font-style: italic;\">de hors settled law<\/span> and directed a stay on its operation, implementation and execution pending further hearing.<\/p>\n<p style=\"font-weight: bold;\">Background<\/p>\n<p style=\"margin-bottom: 3%;\">The petitioners challenged the order dated 14 July 2026 passed by the JMFC (Central), whereby the SHO concerned was directed to register an FIR against the proposed accused persons on the basis of the complaint filed under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-9001803878\" target=\"_blank\">175(3)<\/a> <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-9001804327\" target=\"_blank\">BNSS<\/a>. The Petitioner 1, through her proprietary concern SPM Chemicals &amp; Minerals, had entered into commercial business transactions with Respondent 2 and his brother, who were carrying on business under the name and style of Hind Chemicals and Goel Polymers, respectively. Goods were supplied against purchase orders and invoices in the ordinary course of business. Subsequently, disputes arose regarding the quality of the material supplied and the liability towards certain invoices. The petitioners contended that on account of deficiency in supply of goods, no payment was due from them. The private respondents, however, alleged that the petitioners, pursuant to a preconceived plan, had cheated them of a huge sum of money and subsequently refused to repay the same.<\/p>\n<p style=\"font-weight: bold;\">Analysis<\/p>\n<p style=\"margin-bottom: 3%;\">The Court noted that, as per the police report, goods amounting to &#8377;1.75 crores had been supplied by Respondent 2 at different times and part amount was outstanding. Though the trial court had observed that a Court must not act as a recovery mechanism where a civil remedy lies with the complainant, it nevertheless directed registration of an FIR. Relying upon <span style=\"font-style: italic;\">Indian Oil Corpn. v. NEPC India Ltd.<\/span>, <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0000038064\" target=\"_blank\">(2006) 6 SCC 736<\/a>, the Court reiterated the growing tendency in business circles to convert purely civil disputes into criminal cases and observed that such attempts to settle civil disputes and claims by applying criminal prosecution should be deprecated and discouraged. The Court found that the dispute appeared to be a simple case of breach of contract which had been forcefully converted into a criminal action. A bare perusal of the impugned order revealed that it was <span style=\"font-style: italic;\">ex facie perverse<\/span> and did not prima facie indicate what offence had been made out against the petitioners. The impugned order was, therefore, found to be <span style=\"font-style: italic;\">de hors settled law<\/span>.<\/p>\n<p style=\"font-weight: bold;\">Decision<\/p>\n<p style=\"margin-bottom: 3%;\">The Court issued notice to the respondents and directed them to file their replies before the next date of hearing. Notice was accepted by the learned APP for the State and was directed to be served upon Respondent 2 through all permissible modes. The matter was listed for 15 September 2026. In the meanwhile, the Court directed that there shall be a stay on the operation, implementation and execution of the impugned order dated 14 July 2026.<\/p>\n<p style=\"margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\"><span style=\"font-style: italic;\">Renu Jain<\/span> v. <span style=\"font-style: italic;\">State (NCT of Delhi)<\/span>, CRL.M.C. 5052 of 2026, decided on 21-7-2026<\/span>]<\/p>\n<hr\/>\n<p>Advocates who appeared in this case:<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">For the Petitioner:<\/span> Jugal Wadhwa, Sr. Adv. with Rishabh Wadhwa &amp; Dipti Yadav, Advocates<\/p>\n<p style=\"margin-left: 18pt;\"><span style=\"font-weight: bold;\">For the Respondent:<\/span> Shoaib Haider, APP, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">Delhi High Court stayed an FIR registration order, observing that a simple breach of contract cannot be forcefully converted into a criminal action.<\/p>\n","protected":false},"author":67541,"featured_media":392947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,10],"tags":[27704,32672,36639,9091,2543,39794,112001,69458,112002,96321,112000],"class_list":["post-392946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-breach-of-contract","tag-civil-dispute","tag-commercial-dispute","tag-criminal-proceedings","tag-Delhi_High_Court","tag-fir-registration","tag-indian-oil-corpn-v-nepc-india-ltd","tag-justice-purushaindra-kumar-kaurav","tag-purushaindra-kumar-kaurav","tag-section-1753-bnss","tag-spm-chemicals-minerals"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>DHC: Breach of Contract Can&#039;t Be Forced Into a Criminal Case |SCC Times<\/title>\n<meta name=\"description\" content=\"Delhi High Court stays FIR registration against SPM Chemicals &amp; 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