The Calcutta High Court exercised its inherent powers under Section 482 CrPC to quash criminal proceedings under Sections 406 and 420 IPC, holding that the dispute was purely commercial in nature and had been amicably settled. The Court found no dishonest intention at the inception of the transaction and criticised the police action of freezing ?27 crore bank accounts for a dispute of ?3.3 lakh, terming it investigative overreach. The charge sheet was set aside, bank accounts were defreezed, and the accused were discharged.

Issue of Law

The court addressed whether its inherent jurisdiction under Section 482 of the Code of Criminal Procedure could be exercised to quash non-compoundable criminal offences (specifically Sections 406 and 420 of the IPC) when the underlying dispute is predominantly commercial or private, and the parties have reached an amicable settlement.

Detailed Background and Facts

The Genesis of the Dispute

The case involved a commercial transaction between Indian Compressors Limited (ICL) and Shivam Anaesthesia Limited regarding the export of centrifugal pumps to Bangladesh. A dispute arose over an alleged typographical error in the currency conversion (USD to INR) used to value spare parts. Opposite Party No. 2 (the de facto complainant) alleged that the petitioners dishonestly adjusted Rs. 3,29,220/- from a GST security deposit held in trust to satisfy a price deficit.

Investigative Actions

An FIR was lodged on January 26, 2023, alleging dishonest misappropriation and cheating. Despite the claim being for approximately three lakhs, the police placed a "debit freeze" on the petitioner company's bank accounts, which held a credit limit of Rs. 27 Crores. A charge sheet (No. 84 of 2023) was filed on April 30, 2023, leading the petitioners to seek a revision.

Judgment Discussion

The Calcutta High Court quashed the criminal proceedings under Sections 406 and 420 IPC, holding that the dispute arose from a purely commercial transaction involving a bona fide pricing error and did not disclose any criminal intent at inception. Noting that the parties had entered into an amicable settlement, the Court applied the principles laid down in Gian Singh and Narinder Singh to hold that continuation of prosecution would amount to abuse of process. The Court also strongly criticised the freezing of bank accounts worth ?27 crores for a dispute of ?3.3 lakhs, terming it investigative overreach, and accordingly set aside the charge sheet, lifted the account freeze, and discharged the petitioners.

Subsequent Development

• Quashing of Proceedings: The court quashed the proceedings in G.R. Case No. 78 of 2023 and set aside the Charge Sheet.

• Vacating Account Freeze: The debit freeze on the petitioner's bank accounts was vacated immediately.

• Discharge: The petitioners were discharged from their bail bonds.

Access the Judgment/order here

Court 

In The High Court At Calcutta

Case Title

Indian Compressors Limited & Anr. vs. State of West Bengal & Anr.

Case Number

CRR 530 of 2023 (with CRAN 7 of 2025 and CRAN 8 of 2025) 

Presiding Judge

The Hon'ble Justice Uday Kumar 

Judgment On: January 30, 2026