In Brief
Two US-based companies and their executives were charged with criminal cheating and misappropriation under the Indian Penal Code for allegedly failing to pay the full amount due to an Indian KPO services company under a contract for software and data services. The Supreme Court held that the dispute was essentially contractual in nature, not criminal. Since substantial payments had been made, the disagreement concerned service quality and payment obligations—matters for civil courts, not criminal prosecution. With an arbitration clause already in the agreement and proceedings ongoing before an arbitrator, the Court quashed the criminal proceedings and allowed the appeal.
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