The Calcutta High Court ruled that a commercial dispute over unpaid invoices is civil, quashing criminal proceedings against company directors.
Commercial Dispute Declared Civil by Calcutta HC
The Calcutta High Court has quashed criminal proceedings against the directors of GSA Retail Limited, determining that the ongoing dispute over unpaid invoices was civil in nature, which falls under civil court jurisdiction rather than criminal.
Recognizing the existence of insolvency proceedings under the Insolvency and Bankruptcy Code, the Court underscored that such disputes surrounding trade and commerce should not be subject to criminal prosecution unless a clear violation of criminal law is established.
This ruling has significant implications for the treatment of commercial disputes, delineating the boundaries between civil disputes and criminal liabilities for corporate directors.
Legal professionals should note this differentiation, as it may help in strategizing how to approach similar cases involving financial transactions and insolvency issues.
