Karnataka HC says civil and criminal cases can't go together, quashes cheating FIR against former firm employees

Bengaluru: The Karnataka High Court has quashed criminal proceedings against ex-employees of a software company, observing that in the case at hand, both the civil and criminal proceedings cannot go together. The petitioners were formerly employed with Silicomp India Private Limited, which was earlier known as FIME India, a subsidiary of FIME SAS, a French Company.

The petitioners R Sambandham and Abhishek Chandrashekar, Directors of Payhuddle Solutions Pvt Ltd, Bengaluru and four others challenged the FIR registered by the City Cyber Crime Police against them for offences of theft, cheating, criminal breach of trust, criminal conspiracy and also under the Information Technology (IT) Act. It was alleged in the complaint that after resignation and being relieved from their erstwhile company, they formed their own company and also took away confidential information regarding their earlier employer as well as its customers.

The petitioners contended that data in the form of confidential information cannot form a property as defined under the Indian Penal Code for it to become the subject matter of theft. It was further argued that offences of criminal breach of trust and cheating cannot go together and that it was an act of wrecking vengeance against them for having quit the organization whereby a purely civil dispute is projected to become a crime.

On the other hand, the complainant, Silicomp India Private Limited submitted that data or confidential information if stolen would undoubtedly amount to property and the trial court has rightly taken cognizance of the same.

Justice M Nagaprasanna noted that it is a business rivalry between the petitioners and the complainants/company and the rivalry emerging on the score that the petitioners have started their own company which was the 1st defendant in the suit and thereby taken away all the customers of the complainants/Company which resulted in loss. “Therefore, these factors at best could be the ingredients of a civil suit seeking damages or orders of restraint against the petitioners. The Company has acted correctly, in the considered view of this Court, by filing a civil suit. But, the Company has also chosen to set the criminal law into motion. The two cannot be considered to go hand in hand in the peculiar facts of the case,” Justice Nagaprasanna said.

The court further said, “The offence is one of criminal breach of trust and cheating. Both the offences cannot be allowed in the case at hand. The criminal justice system should not be put into use for the purpose of recovery of money, unless the facts are glaring and make out a prima facie offence under the criminal law.”