Authority: High Court at Calcutta

Order Date: 28 August 2026

Case Overview

  • Parties: Petitioner – Haier Appliances India Pvt. Ltd.; Opposite – Ganesh Devcon Private Limited; original lessor – SMCG Warehousing LLP.
  • Nature of proceedings: Criminal revision under Section 406 and Section 420 of the Indian Penal Code, 1860, concerning Complaint Case No. 348 of 2020 pending before the Judicial Magistrate, 4th Court, Howrah.
  • Background: Haier entered a lease with SMCG on 20 January 2020 for a warehouse at Sankhrail Industrial Park (monthly rent ₹8,84,103; security deposit ₹26,52,309). The lease allowed extension up to nine years and permitted assignment to a third party with Haier’s consent. In June 2020 SMCG informed Haier of a planned sale; the property was sold to Ganesh Devcon on 22 July 2020. Haier vacated on 30 July 2020, returned the security deposit to SMCG, and sought possession of keys.
  • Allegations: The complainant alleged that Haier, having assured continuation as lessee, induced the sale and then breached the assurance, constituting cheating (Sec 420) and criminal breach of trust (Sec 406). The complaint cited a warrant of arrest and summons against Haier and its directors.
  • Petitioner’s submissions: Argued the dispute is purely civil, no cheating or breach of trust, no privity of contract with the complainant, and that the lease with SMCG was terminated before any new lease could be formed. Highlighted email correspondence (June 25 2020, July 15 2020, July 17 2020, July 18 2020) confirming termination and refund calculations (security deposit adjusted to ₹16,75,375.81 after GST).
  • Opposite’s submissions: Contended Haier fraudulently induced the complainant to accept the security‑deposit transfer, violating assurances and committing offences under Sec 420 read with Sec 120B.
  • Court’s analysis: Determined no privity of contract existed between Haier and the complainant; the only lease was between Haier and SMCG, terminated on 20 July 2020. The security‑deposit draft of ₹16,75,375.81 was handed to the complainant on 21 July 2020. No written assurance to the complainant was found, and the alleged representations were not reduced to writing. The court held that the ingredients of cheating and criminal breach of trust were absent, citing Supreme Court precedents on the distinction between civil breach and criminal cheating. The magistrate’s simultaneous charge under Sec 406 and Sec 420 was deemed improper.

Final Outcome

  • The criminal revisional application is allowed.
  • The proceeding in Complaint Case 348 of 2020 before the Judicial Magistrate, 4th Court, Howrah under Sections 406 and 420 IPC is quashed.
  • All other connected applications, if any, are disposed of.
  • Urgent photostat certified copies of the order may be supplied to parties upon compliance with necessary formalities.

Topics: Criminal Revision, Lease Dispute